Dive Brief:
- Family premiums for employer-sponsored health plans increased by 7% in 2024, with employers footing the bill for the majority of the increase, according to a new report from health policy organization KFF.
- The average annual premium for single coverage hit $8,951 in 2024 and was $25,572 for family coverage, according to the report.
- Rising plan prices didn’t often translate into extended benefit offerings. The majority of major employers did not offer GLP-1s for weight loss — or in-vitro fertilization — in their 2024 benefits package, according to the report.
Dive Insight:
Employer-sponsored premiums have risen over the past five years as costs of providing care increased alongside inflation, according to KFF.
In 2024, most employers elected not to pass on increased costs to their employees.
Workers’ average annual single coverage deductible, for example, sat at $1,787 in 2024, only a fraction above last year’s $1,735.
“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” KFF President and CEO Drew Altman said in a press release. “In the tight labor market in recent years, they have not been able to continue offloading costs onto workers who are already struggling with health care bills.”
Employers’ generosity did have limits, however. Most employers elected not to cover extended family planning services, for example, such as IVF, or new weight loss therapies.
Healthcare stakeholders have been particularly keen to see whether employers would cover GLP-1s — glucagon-like peptide-1 receptor agonists — which were originally developed to treat diabetes but have been marketed to help patients lose weight quickly.
By 2030, 30 million Americans, or about 9% of the U.S. population, could be on GLP-1s for weight loss, according to an analysis last year by investment bank J.P. Morgan.
While consumers are largely sold on the drugs’ promise, study after study has shown employers’ hesitance to add the popular drugs to their benefit packages.
KFF found fewer than 1 in 5 firms with 200 or more employees covered the drugs in 2024.
Employees who were eligible for coverage had to jump through hoops to get the drugs. More than half of large firms that cover GLP-1s required employees meet some condition, such as meeting with a dietitian, psychologist, case worker or therapist before getting prescriptions.
Eight percent of large companies offering GLP-1s required employees to enroll in a lifestyle or weight loss program prior to turning to the medication.
Employers may be attaching conditions to the prescriptions due to concerns over cost.
Each dose of the drugs can cost hundreds to thousands of dollars, creating concerns about elevated pharmacy spend. Approximately a third of large employers that offer GLP-1s said the medications would have a “significant impact” on their prescription drug spending in 2024.
Some employers that have offered the drugs — including the North Carolina state government — have even backtracked on supporting the offering due to how cost-prohibitive it is to provide coverage.
Employer healthcare costs are expected to rise 9% in 2025, according to a recent study from consultancy Aon. Against that outlook, few are looking to make new investments in pricey products.
KFF found that only 3% of large firms that currently do not cover GLP-1s are “very likely” to do so next year. About a quarter of large companies say they are “somewhat likely” to cover the drugs.