Walmart Adds GLP-1 Coverage for Some Employees

It’s not a typo. Walmart, once notoriously stingy with employee benefits, is offering an expanded suite of healthcare perks for its workers.

On Tuesday, the Big Box supergiant and America’s largest private sector employer told workers that it plans to expand free insurance coverage to more than 250 prescription drugs, including GLP-1s for some workers with type 2 diabetes, according to a memo seen by Bloomberg. Consider it an against-the-grain move in corporate America’s larger war on rising healthcare prices.

Looking Trim

Forget about diesel. It’s healthcare costs that continue to be at the epicenter of America’s inflation conundrum, and employers and employees alike are feeling the pain. Total health benefit costs per employee are set to rise by more than 8% next year, according to a recent Marsh survey of 1,800 US employers. That’s the highest year-over-year jump since 2003. Prescriptions are at the center of the trend, with the total tab for prescription medications expected to reach more than $560 billion in 2026, an increase of 8.3%, according to a report out this summer by the Centers for Medicare and Medicaid Services. “A big part of this is GLP-1s,” John Poisal, deputy director at the National Health Statistics Group at CMS, told reporters.

Unlike Walmart, many large employers are now looking for ways to trim their healthcare bills:

• Pepsi, Starbucks, Lowe’s, Cigna and PwC, as well as several state governments, are among the 6% of large employers cutting coverage this year for GLP-1s for weight loss (note Walmart does not provide coverage for the weight-loss version of the drug), according to a recent study by Marsh subsidiary Mercer. Another 5% said they are considering making the cut next year; roughly half of employers offer coverage of GLP-1s for weight loss.
• Roughly half of large employers plan to make cost-cutting changes to healthcare plans, such as raising deductibles or copays. Including broad coverage for GLP-1s can increase monthly premiums on employer-sponsored plans by as much as 14%, according to the Employee Benefit Research Institute.

Baby Steps: Don’t give Walmart too much credit. Most companies offer coverage for GLP-1s for diabetes, even if coverage for weight loss has been scaled back. Still, the new insurance plan is part of a broader initiative to boost worker morale; the company has slowly increased employee wages over the past decade, boosting retention by as much as 10%. It’s not much, but it’s progress for a company long criticized for paying such low wages that thousands of employees receive aid from federal government assistance programs such as Medicaid and SNAP.