Glucagon-like peptide-1 receptor agonists (GLP-1s) such as Ozempic, Wegovy, Mounjaro, and Zepbound have reshaped the landscape of diabetes and obesity treatment and quickly become one of the most significant cost drivers for employer-sponsored health plans.
A 2025 Kaiser Family Foundation employer health benefits survey shows that nearly one in five large employers cover GLP-1 drugs when used primarily for weight loss, with coverage especially common among the largest employers. Many of these employers report that utilization has been higher than expected and that covering these medications has had a significant impact on prescription drug spending.
At the same time, the rapid growth in GLP-1 prescriptions to treat obesity raises important legal considerations for employers and insurers, including whether and under what circumstances obesity may constitute a disability under the Americans with Disabilities Act (ADA) and how that determination may affect health plan design and coverage decisions.
Is Obesity a Disability Under the ADA?
The ADA defines “disability” broadly, especially after the 2008 ADA Amendments Act. However, courts have a history of being cautious when it comes to obesity:
- Most federal courts of appeals that have addressed the issue have held that ordinary or nonmorbid obesity is not a disability under the ADA because it does not, by itself, substantially limit a major life activity. Further, even morbid obesity on its own is not a disability under the ADA unless caused by an underlying physiological disorder or condition. This holding has been adopted by multiple circuits, including the Second, Sixth, Seventh, and Eighth.
- On the other hand, the Equal Employment Opportunity Commission and some district courts have taken the position that morbid obesity can be an impairment even without proof of a separate physiological cause. Many individuals with obesity have other conditions that qualify as disabilities under the ADA such as diabetes, heart disease, or obstructive sleep apnea—all of which can be treated or improved with GLP-1s.
- Apart from the ADA, some state and local jurisdictions, including San Francisco and Michigan, include “weight” as a protected characteristic in their anti-discrimination laws. Some state and federal courts have recognized weight as a potential disability without any underlying physiological condition under state anti-discrimination laws.
What the ADA Requires of Employer-Sponsored Group Health Plans
For large employer health plans, there is currently no broad federal mandate requiring coverage of GLP-1 drugs for either diabetes or obesity. Plan sponsors, especially those that sponsor self-insured group health plans, retain significant discretion to decide which drugs to cover, subject to the Affordable Care Act market reforms and Mental Health Parity and Addiction Equity Act requirements.
Some states are beginning to move toward coverage mandates. For instance, North Dakota recently became the first state to require certain insurance coverage for GLP-1 medications by adding them to its essential health benefits benchmark plan. Other states are considering expanding coverage for obesity treatment by including GLP-1 medications in their Medicaid and state employee health plans.
At the federal level, the ADA by itself does not require employers to provide coverage for any particular medical condition. The ADA also generally does not require employers to cover any specific treatment, drug, or benefit even if it is used to treat a disability; however, the ADA does prohibit employers from discriminating on the basis of disability in the “terms, conditions, and privileges of employment,” which includes the design and administration of the health benefits they offers to their employees.
Practical Takeaways for Plan Sponsors
Given the rapidly evolving GLP-1 landscape, it may be prudent for plan sponsors to:
- Evaluate the use of prior authorization, step therapy, quantity limits, or outcome-based wellness designs to manage utilization and cost exposure.
- Evaluate ADA compliance by ensuring plan terms do not explicitly limit or exclude coverage because of a disability.
- Analyze HIPAA nondiscrimination risks by limiting mid-year changes to coverage and confirming that similarly situated plan participants, regardless of disability status, are subject to the same GLP-1 coverage terms.
- Ensure all utilization management techniques are analyzed in the plan’s comparative analysis, as required by the Mental Health Parity and Addition Equity Act, as amended by the Consolidated Appropriations Act, 2021, to ensure parity in the plan as written and in operation.
- Carefully review contracts with pharmacy benefit managers to understand how coverage (and coverage changes) impact rebates and other cost-saving measures.
- Communicate clearly with employees as GLP-1 drugs are highly visible and heavily marketed; clear plan document language and communication can help manage expectations and reduce confusion, particularly where plan coverage is limited to diabetes treatment and excludes obesity-only indications.
Ultimately, there is no one-size-fits-all approach to GLP-1 coverage. Yet employers who document their rationale, align coverage with clinical standards, and apply plan rules consistently will be well positioned to manage legal and compliance risks. Proactively reviewing plan design, especially exclusions and utilization management criteria, can help mitigate potential compliance concerns and better prepare plan sponsors for the next phase of developments in GLP-1 coverage.