As demand for GLP-1 medications like Ozempic, Wegovy, Mounjaro, and Zepbound continues to surge, benefits administrators and health plans are facing new challenges — and new opportunities — in balancing cost containment, clinical effectiveness, and consumer engagement.

Originally developed to treat type 2 diabetes, GLP-1 receptor agonists are now widely sought for their weight management benefits. But they come with a steep price tag and evolving coverage dynamics. This has created a complex scenario for employer-sponsored plans, especially those that offer consumer-directed healthcare (CDH) accounts such as HSAs, FSAs, and HRAs.

Let’s break down the role CDH accounts can play in helping plan sponsors and participants navigate the rising demand for GLP-1s.

GLP-1s mimic a naturally occurring hormone that helps regulate blood sugar, suppress appetite, and promote weight loss. While their therapeutic impact is significant — particularly for individuals with diabetes and obesity-related comorbidities — the average list price can run well over $1,000 per month. Payers are grappling with formulary controls, prior authorization protocols, and ROI justification.

And while there are forces at play helping to curb the sticker shock, the drugs remain pricey. From a benefits design perspective, this creates tension: employers want to support employee well-being, but not at unsustainable cost.

CDH accounts offer a way to bridge the affordability gap for employees and members, especially when coverage is limited or out-of-pocket costs are high. Here’s how:

Health savings accounts (HSAs)

• Triple-tax advantage: Contributions are tax-deductible, grow tax-free, and can be used tax-free for qualified medical expenses.
• GLP-1 eligibility: If the medication is prescribed for a medical condition (e.g., type 2 diabetes, obesity with comorbidities), it qualifies as a reimbursable expense.
• Off-label & OTC support: Off-label GLP-1 use and certain OTC alternatives may also be eligible with a prescription and letter of medical necessity (LMN).
• Strategy tip: Educate employees on proper documentation for reimbursement of nontraditional or off-label use cases.

Flexible spending accounts (FSAs)

• Employer-sponsored, pre-tax: Funded by employee payroll deductions and often underutilized.
• GLP-1 use: Eligible if medically necessary and prescribed.
• Off-label & OTC: Same rules apply as HSAs (must be medically necessary and supported by an LMN).
• Timing critical: Plan-year expiration and use-it-or-lose-it rules require intentional planning and communication.

Health reimbursement arrangements (HRAs)

• Employer-funded with customizable rules: HRAs are highly flexible but vary based on plan design.
• Coverage note: Not all HRAs cover prescription drugs; plan design should explicitly allow for GLP-1 reimbursement, including off-label use.
• OTC flexibility: Employers may opt to reimburse OTC alternatives through HRA designs—an opportunity to provide relief while managing cost exposure.

Given the growing use of GLP-1s for weight loss, sometimes before full FDA approval, benefits teams are frequently asked whether CDH accounts can help with off-label prescriptions or OTC weight management alternatives.

Rx + LMN = Requires a prescription and a letter of medical necessity confirming a medical condition is being treated

• Off-label use is not excluded by default. It’s about documentation and medical necessity.
• OTC weight-loss supplements (e.g., fiber aids, herbal appetite suppressants) are only eligible when prescribed to treat a medical condition like obesity or prediabetes.
• HRAs offer the most flexibility but require deliberate plan design and employee education.

Reinforce education around CDH usage

Too often, members are unaware that they can use their CDH funds for high-cost prescriptions like GLP-1s, especially in off-label or uncovered scenarios. Equip HR teams with materials that clarify eligibility, documentation needs, and how to submit claims.

Clarify plan documents

Ensure plan summaries and HRA documents clearly state what’s eligible for reimbursement, including rules around off-label prescriptions and OTC products.

Promote integration with weight management programs

Link GLP-1 access to coaching, clinical pathways, and evidence-based wellness tools. This not only enhances outcomes but creates a pathway for better ROI.

Offer transparency tools and vendor support

Partner with telehealth or pharmacy benefit vendors that offer access to weight management clinicians and prescription affordability programs.

GLP-1s are reshaping the landscape of chronic disease and weight management. For benefits administrators and health plans, CDH accounts provide a valuable lever to support affordability. This is especially true when used strategically to accommodate off-label use and OTC support within regulatory guidelines.

When paired with thoughtful plan design, smart communication, and integrated care strategies, CDH tools can help bridge the gap between clinical innovation and consumer affordability — delivering real value to both employers and employees.