With obesity now understood to be a chronic health condition, it’s time for plan sponsors to revisit their approach to weight loss medications, said Philippe Laplante, principal for pension and benefits at Eckler Ltd., during a session at Benefits Canada’s 2024 Vancouver Benefits Summit in May.
The conversation about extending coverage to new, high-cost anti-obesity medications comes at a time when the role of the plan sponsor has evolved and many are having to balance growing employee expectations of their benefits plan against the cost of delivering various new offerings.
Read: Claims for obesity drugs increased 42% in 2023, 92% since 2020: report
“Not many employers have the resources and the money to cover everything. It becomes a question of value and of assessing the decisions we take for our employees and our program. When an employer decides to add something to their plan, there are going to be a lot of considerations, because there’s an opportunity cost to put the money there and not elsewhere.”
Obesity has been recognized as a complex and chronic disease by the World Health Organization and other public health institutions and is characterized by excessive fat accumulation that can impact someone’s health and well-being and increase the risk of developing other chronic diseases. A 13 per cent weight loss for someone with obesity can reduce the risk of type two diabetes, sleep apnea, hypertension, asthma and dyslipidemia.
However, new weight loss drugs come with a hefty price tag of roughly $4,500 per molecule — along with associated pharmacist fees, insurance tax and general benefit fees — said Laplante. “We really want to make sure that the money we put into it is being used for health reasons.”
Canada’s four largest insurers have taken various approaches to ensure they’re only covering the medically necessary use of these drugs. All four insurers currently cover anti-obesity drugs on their general drug list and leave it up to plan sponsors to decide whether to provide coverage through their plans. Some have chosen to reimburse the drug for however much the plan allows while others have introduced prior authorization procedures, such as approving plan members with a slightly lower body mass index score but who have a comorbidity or a higher BMI score with no comorbidities.
Read: What plan sponsors should know ahead of rollout of new obesity drugs in Canada
Employers looking to discourage the cosmetic use of these drugs could introduce annual or life-time maximums, said Laplante, noting Eckler typically sees annual maximums of between $1,500 and $10,000 and lifetime maximums between $10,000 and $25,000.
Plan sponsors can work with consultants to model the rough percentage of their employee population to whom the drugs would be useful — based on incidence rates in the general population — to get a sense of the financial impact of covering the drugs.
However, not all eligible plan members will actually use the drug. Eckler recently worked with a plan sponsor with 200 employees and their modelling suggested roughly 57 employees would be eligible. After setting an $1,800 annual maximum, only three employees claimed for the drug in the first year, translating to one per cent of health premiums.
Laplante said coverage for dieticians and nutritionists, exercise and health professionals like kinesiologists and mental-health supports such as psychologists and internet-based cognitive behavioural therapy can also support plan members with obesity.
Read more coverage of the 2024 Vancouver Benefits Summit.