Many companies intend to reduce health benefits as expenses for weight loss increase.

Employers Planning to Expand Health Benefits Amid Rising Costs

NEW YORK – A recent survey from consulting firm Mercer indicates that over half of large employers are set to enhance their health benefits in the upcoming year. This decision comes as weight loss medications and increasing expenses from specialty drugs are tightening budgets.

Of the employers with over 500 employees, 51% expressed intentions to boost cost sharing in 2026. This includes raising deductibles and maximum out-of-pocket expenses, a rise from the 45% who reported similar plans for 2025.

Concerns surrounding the price of GLP-1 weight loss drugs, such as Novo Nordisk’s Wegovy, have surged, with 77% of employers highlighting this as a major issue. “More clients are expressing uncertainty about how long they can keep covering these medications,” commented Alisha Furuno, who leads pharmacy innovation at Mercer, in a recent interview.

Although some employers have previously covered the GLP-1 drugs, increasing prices are prompting them to reconsider this approach for the sake of long-term health savings. “Employers facing significant cost increases in 2026 may feel that this report is out of touch,” Furuno noted.

As the competition in the weight loss drug sector escalates over the next few years, Furuno believes that pharmacy benefits will gain stronger negotiating power with drug manufacturers, facilitating more substantial cost savings.

Novo’s Wegovy and Eli Lilly’s Zepbound are priced at $1,086 and $1,059, respectively, but many patients end up paying lower amounts through their insurance plans. Research has indicated that prescription drug costs rose by 8% last year, with Mercer forecasting a 5.8% increase in overall health benefits costs for 2025.

Additionally, employers are exploring alternatives to traditional pharmacy benefit managers (PBMs).

PBMs like CVS Caremark, Cigna’s Express Scripts, and UnitedHealthcare’s Optum RX function as intermediaries, negotiating discounts and fees on behalf of health plans and employers. They manage the list of covered medications and facilitate reimbursements to pharmacies.

However, drug companies argue that they are keeping a larger share of discounts instead of passing them on to patients and payers.

The scrutiny over regulations and demand for transparency has sparked interest in new PBM models, with 34% of employers considering a switch. The study revealed that 40% of employers are weighing alternative contract structures for prescription drug benefits, such as pricing based on wholesale costs paid by retail pharmacies.

Regulators have criticized major PBMs for directing patients toward pricier medications, contributing to inflated prices and increased revenue.

On Tuesday, California’s Calpers Pension Fund, the second-largest public purchaser in the U.S., announced that Caremark will succeed UnitedHealth’s Optum RX as its PBM in 2026. Calpers stated that the five-year agreement with Caremark includes mandates for transparency and oversight.