Coffee giant Starbucks is among the latest companies cutting highly valued employee benefits—this time, the coveted coverage of GLP-1 medications for weight loss.
Business Insider reports that coverage for the popular drugs will end in October, although employees may still be able to access the drugs to treat other conditions, like diabetes. Starbucks’ move highlights the realities facing those in the benefits and HR space: Healthcare costs are soaring, largely driven by expensive GLP-1s, and organizations are willing to scale back coverage for benefits that pack a punch to balance costs.
Ongoing employer hesitance on GLP-1s
A report from Business Group on Health found that about two-thirds of employers surveyed cover GLP-1s for weight management and other conditions. Yet, it’s a costly proposition. About 80% say the coverage has pushed up their healthcare costs, while around 10% of those who currently offer the benefit say they won’t continue to do so in 2027.
Factoring into those decisions may be the ROI that has yet to materialize for some organizations.
Business Group on Health found that more than half of employers covering GLP-1s for weight management expect the drugs to bring “significant” clinical benefits to employees, but most haven’t seen obesity rates or other health metrics improve.
“Against the backdrop of anticipated double-digit healthcare cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for healthcare budgets—and overall affordability,” said Ellen Kelsay, president and CEO of Business Group on Health.
In a separate study from the International Foundation of Employee Benefit Plans, a much smaller number (36%) of employers cover GLP-1s for weight loss and other conditions, but employer hesitation persists. The proportion of organizations offering coverage only budged up 2 percentage points from 2025.
Cost is the clear sticking point, according to IFEBP, which estimates that GLP-1 drugs account for more than 11% of claims this year, compared to 6.9% three years ago.
Bank of America: a different GLP-1 story
But while Starbucks is ending GLP-1 coverage, other organizations are persisting. For instance, Bank of America CEO Brian Moynihan recently told CBNC it plans to continue to annually sink about $250 million of a total $2 billion healthcare spend into its GLP-1 benefits.
Moynihan said employees are reporting weight loss and other health benefits and, despite the high cost—which he said the organization is consistently looking to improve—the organization considers it a promising investment.
“Believe me, we’re pounding everybody on price and trying to get them as cheap as possible,” Moynihan said. “But our view is that because of the long-term health benefits, plus there may be more short-term health benefits … it’s a good investment.”
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