Employers Explore Novel Approaches to Manage Rising Healthcare Costs

With employer healthcare costs projected to surge by near-double-digit percentages in 2027, plan sponsors are grappling with ways to prevent passing the bulk of those expenses down to their participants.

Recent estimates of cost hikes ranged from 9.2% to 11% before plan design changes, stemming primarily from claims related to specialty drugs and treatments for cancer, musculoskeletal and cardiovascular conditions, diabetes, and weight loss. But by incentivizing employees to seek preventive care, setting criteria for access to weight loss medications, and leveraging pharmacy services beyond drug dispensing, employers hope to better manage healthcare costs next year.

Preventive Programs

Shay Garrioch, chief human resources officer at the Culinary Institute of America, says her company’s healthcare cost containment strategy is two-fold: First, check the marketplace for the best value plans for employees; and second, avoid significant future claims.

The Culinary Institute has considered, “What can we do to keep ourselves from having those big-dollar claims?” according to Garrioch. “How can we pay for the smaller claims now?”

Searching for a way to mitigate claims inspired the Culinary Institute to launch its points-based wellness incentive program: Employees who accumulate credits beyond a certain threshold of points each year receive 10% off their health insurance premium for the following year.

Employees accumulate points by scheduling and attending their annual physical exams, dental checkups and women’s health screenings, among other proactive office visits. In addition, the Culinary Institute rewards employees with points for participating in fitness and financial well-being challenges, such as hitting a specific step goal or speaking with a financial adviser.

The program takes a “whole-person approach to wellness” while mitigating the costliest claims, Garrioch says.

GLP-1 Medications’ Cost Injections

As Americans’ increased utilization of glucagon-like peptide-1 medications to treat obesity continues to raise employers’ pharmacy costs, plan sponsors are searching for ways to manage them without cutting off access for people most in need of the drugs.

The share of U.S. adults taking GLP-1 medications for weight loss rose to 11% in 2026, up significantly from 3% in 2024, according to Gallup’s National Health and Well-Being Index. Overall, 15% of respondents surveyed said they used the medicine for weight loss at some point in time, up from 6% two years ago.

Meanwhile, an International Foundation of Employee Benefits survey published earlier this year revealed GLP-1 medications used for weight loss comprised an average of 10.5% of employers’ total pharmaceutical claims last year, an increase over the 2024 average of 8.9% and the 2023 average of 6.9%.

In a report on its 2027 Employer Healthcare Strategy Survey, the Business Group on Health reported that 68% of employers said they are experiencing an increase in utilization of GLP-1s for weight management, and 24% have—or will, in 2027—drop coverage of the drugs when used for that purpose.

Organizations such as the nonprofit Peterson Health Technology Institute have recommended requiring employees to participate in behavior-, nutrition- or lifestyle-change programs as a condition of plans paying for their GLP-1 coverage. According to insurance and risk management brokerage firm Brown & Brown Co.’s “State of GLP-1 Medication Coverage for Weight Loss: Employer Survey Results,” 20% of employers covering GLP-1s for weight loss required employees receiving the drugs to participate in a lifestyle-modification program in 2025. Even more (28%) were considering requiring participation for 2026.

Among respondents to Brown & Brown’s employer survey, 13% required step therapy—either nonmedication weight loss programs or non-GLP-1 weight loss medications—as an alternative to, or prior to, taking GLP-1s. An additional 15% said they were considering implementing a step-therapy requirement in 2026.

Garrioch says that beyond requiring employees to meet certain criteria to access GLP-1 medications, employers should also develop “exit strategies” to ensure employees keep weight off after they stop taking the medication. The Culinary Institute unsuccessfully instituted a program that required employees to meet specific criteria, such as trying to lose weight in more traditional ways first, to gain access to the drugs. However, criteria for eligibility were not enough to keep costs from ballooning, and the plan sponsor’s carrier discontinued the program.

According to a study published by the British Medical Journal in 2025, people on weight-loss medications return to their baseline weights within an average of 1.7 years after stopping treatment.

Looking ahead, Garrioch says the Culinary Institute hopes to find a plan that ensures employees stay healthy after discontinuing weight loss drugs.

“We don’t want to have to pull that coverage from the plan,” Garrioch says. “But [we] need there to be some gates around it.”

Pharmacies as More Than Drug, Vaccine Dispensaries

To close employee access gaps and lower healthcare costs, employers can also leverage neighborhood pharmacies, according to a recent report from the Health Action Alliance and the National Association of Chain Drug Stores.

According to the HAA-NACDS report, more than 30% of Americans live in areas with a shortage of primary medical care—yet more than 96% of Americans live within 10 miles of a local pharmacy, and more than half already visit their pharmacy at least once per month. Meanwhile, few employees and employers are aware that pharmacies provide healthcare services beyond dispensing prescriptions and administering vaccines.

“Pharmacies are capable of delivering much more than what our current healthcare system is set up to reimburse,” says Sarah Rauzin, director of health strategy and insights at the Health Action Alliance. “We’re underutilizing pharmacists for the full scope of their services.”

The HAA-NACD report stated that pharmacists are trained to provide a wide range of preventive and care management services, such as pressure and lipid level screenings; treatment of common infections; nutrition education and smoking cessation guidance; and cancer prevention and early detection, including risk counseling and care referrals.

For minor illnesses, the HAA-NACDS report stated that pharmacy-based care can cost about $278 less per episode of care than traditional settings, which include primary care offices, emergency departments and urgent care locations.

The study also found support for pharmacy-based care: 89% of employee respondents to the HAA-NACDS survey held a “positive perception” of pharmacy-based healthcare, and 71% said using more of the services would improve their health. Nearly two-thirds (65%) of employees surveyed said the services would help them avoid missing work.

Rauzin says employers can include pharmacy usage in open enrollment communication by messaging and posting around the office. The survey found that 62% of employees said they were more likely to use pharmacy-based services if recommended by their employer.

The HAA-NACDS playbook recommended employers could take the following steps to utilize a pharmacy-based solution:

• Analyze data to identify and monitor top medical cost drivers;
• Choose the right pharmacy partnership model, such as integration through existing medical benefits —meaning pharmacy services are covered and reimbursed like physician visits and other medical services— or direct pharmacy contracting by establishing a direct agreement with a pharmacy partner to provide defined healthcare services at a negotiated rate;
• Consider alternate models, such as integration with existing clinical vendors, on-site pharmacy clinics for workplaces and mobile clinics to reach distributed or underserved populations;
• Negotiate a scope of services agreement; and
• Communicate to employees the availability of the pharmacy-based solutions.