From modeling health plan trends across multiple employer size segments over three renewal cycles, the GLP-1 variable stands out as the widest band of actuarial uncertainty we have tracked. Premium impact projections span a threefold range depending on a single assumption: how broadly you define eligibility. The Employee Benefit Research Institute quantified this range in Issue Brief No. 644, building a simulation-based model that maps how GLP-1 coverage affects employer health plan premiums under varying drug costs, adherence rates, and eligibility criteria. The answer runs from a manageable 5.3% increase to a 13.8% premium shock, and the variables separating those outcomes are the exact inputs health actuaries must pin down for 2027 renewal pricing.

This analysis dissects the EBRI simulation methodology, isolates which assumptions produce the widest premium swings, and connects the results to the employer coverage decisions playing out across the 2026 and 2027 renewal seasons. Most public commentary frames GLP-1 as a binary coverage question. The EBRI model shows it is a multivariate pricing problem where eligibility criteria, adherence persistence, drug pricing, and cost-sharing design interact to produce premium outcomes that differ by a factor of three.

13.8%
Peak Premium Lift: Broad Eligibility + Perfect Adherence (EBRI)
57M
Privately Insured Adults Clinically Eligible for GLP-1s (KFF)
$617-$766
Net GLP-1 Cost per 30-Day Supply (ICER)

The EBRI Simulation Architecture

EBRI's model simulates a hypothetical firm with 5,000 workers, running 10,000 iterations per scenario to produce stable premium impact distributions. The design choices are worth understanding because they define the boundaries of the results.

The health care spending baseline draws from the MarketScan claims database, the standard commercial claims repository for employer-sponsored plan research. EBRI assigned each simulated worker a BMI from a log-normal distribution (mean log = 3.33, standard deviation = 0.210251), calibrated to the Behavioral Risk Factor Surveillance System (BRFSS). Diabetes was assigned probabilistically at a 10% prevalence rate, consistent with national estimates. Ten percent of simulated individuals received zero health care spending; the remaining 90% received spending values sampled from the empirical MarketScan distribution. An 85% medical loss ratio converted total health care spending into premium estimates.

Nine GLP-1 drugs were modeled, with each treated individual randomly assigned one of the nine. Drug costs were sourced from the ICER (Institute for Clinical and Economic Review) report, normalized to a 30-day supply. Net costs after manufacturer rebates ranged from $617 per month for Wegovy (semaglutide 2.4 mg) to $766 per month for Saxenda (liraglutide 3 mg), with Zepbound (tirzepatide) at $725. These net figures sit well below list prices, which run $1,086 to $1,349 per month, but they represent what employer plans actually pay after PBM rebate passthrough.

Drug costs were scaled by treatment duration: 1x for the first 4 to 8 weeks, 2x for weeks 8 to 12, and 3x for 12 weeks and beyond. This dose escalation schedule reflects real-world titration protocols for semaglutide and tirzepatide, where patients start at lower doses and titrate upward over 12 to 16 weeks.

EBRI tested results across two eligibility definitions and two adherence assumptions, producing an eight-scenario matrix when combined with two cost-sharing levels.

Premium Impact at Current Net Drug Pricing

The headline results cover current net pricing, meaning the $617 to $766 per month range that employer plans pay after rebates. The premium impact depends heavily on which eligibility criteria the plan adopts and whether employees persist on therapy.

Eligibility Criteria 1 (Narrow): Coverage limited to employees with diagnosed diabetes or clinical obesity (BMI ≥ 30). This is the most restrictive tier and reflects how many employer plans initially structured GLP-1 benefits, limiting coverage to FDA-approved indications with clinical documentation requirements.

Eligibility Criteria 2 (Broad): Coverage extended to diabetes, obesity, or overweight with at least one comorbidity (BMI ≥ 25 with a risk factor such as hypertension, dyslipidemia, or cardiovascular disease). This broader definition captures the population eligible for weight management indications under current FDA labeling for semaglutide 2.4 mg (Wegovy) and tirzepatide (Zepbound).

EBRI Simulated Premium Increases at Current Net GLP-1 Drug Pricing
Eligibility Criteria Adherence $0 Copay $90 Copay
Narrow (Diabetes/Obese) Real-World (BHI) 6.1% 5.3%
Narrow (Diabetes/Obese) Perfect 8.1% 7.1%
Broad (Incl. Overweight) Real-World (BHI) 10.4% 9.0%
Broad (Incl. Overweight) Perfect 13.8% 12.0%

The range is striking. A plan covering GLP-1s only for diabetes and obesity with real-world adherence patterns and a $90 per month copay faces a 5.3% premium increase. The same plan expanding eligibility to include overweight employees with comorbidities, under perfect adherence and zero cost-sharing, faces a 13.8% premium increase. The gap between those two scenarios is 8.5 percentage points, and the bulk of it comes from the eligibility expansion rather than the adherence or cost-sharing assumptions.

The $200/Month Price Point: A Different Actuarial Picture

EBRI ran a parallel set of simulations at a hypothetical $200 per month net drug cost, well below current pricing but within the range that biosimilar competition or government negotiation could eventually produce. Eli Lilly's direct-to-consumer channel already offers Mounjaro at $299 to $449 per month, and the CMS Medicare GLP-1 Bridge program sets a $245 manufacturer price for Part D coverage starting July 2026. If commercial PBMs negotiate toward these reference points over the next two to three years, the $200 scenario becomes less hypothetical. Our analysis of the CMS GLP-1 Bridge pricing structure details how this federal reference point could compress commercial net costs.

EBRI Simulated Premium Increases at $200/Month Net Drug Cost
Eligibility Criteria Adherence $0 Copay $90 Copay
Narrow (Diabetes/Obese) Real-World (BHI) 1.7% 1.0%
Narrow (Diabetes/Obese) Perfect 2.3% 1.3%
Broad (Incl. Overweight) Real-World (BHI) 3.0% 1.6%
Broad (Incl. Overweight) Perfect 3.9% 2.2%

At $200 per month, even the broadest eligibility scenario with perfect adherence produces only a 3.9% premium increase with zero cost-sharing. The worst case with a $90 copay drops to 2.2%. These results suggest that drug pricing is the single most powerful lever for making expanded GLP-1 coverage actuarially sustainable. The problem is timing: generic semaglutide is not expected in the U.S. market until 2031 to 2032 at the earliest, with tirzepatide generics even further out at 2036. For actuaries pricing the 2027 and 2028 renewal cycles, the current $617 to $766 net cost range is the operative assumption.

Adherence: The Variable That Swings Premiums by Half

EBRI modeled two adherence scenarios, and the gap between them is substantial enough to warrant separate treatment in any renewal pricing exercise.

Real-world (BHI) adherence draws from Blue Health Intelligence's analysis of BCBS commercial claims data. The persistence distribution is sobering: 42% of patients continue treatment for 12 weeks or longer, 15% persist for 8 to 12 weeks, and 42% discontinue within the first 4 to 8 weeks. A separate BCBS analysis of nearly 1.5 million medical records found that two in three patients discontinue before the 12-week mark, with over 40% stopping after just four weeks. InsiderX data paints an even starker long-term picture: only 32% of patients continue into year two, and just 15% persist into year three.

Perfect adherence assumes 100% of eligible employees remain on therapy for 12 weeks or longer, reaching full therapeutic dose. This is a ceiling scenario, useful for stress-testing but unlikely to materialize in practice given the documented discontinuation patterns.

The adherence assumption moves premiums by 2 to 3.4 percentage points across all scenarios. Under narrow eligibility with a $0 copay, the spread between real-world and perfect adherence is 2.0 points (6.1% vs. 8.1%). Under broad eligibility with a $0 copay, the spread widens to 3.4 points (10.4% vs. 13.8%). This makes discontinuation rates a critical modeling input. An actuary using industry-average adherence data for a population that happens to have higher persistence, perhaps because the employer covers the drug at $0 cost-sharing with strong wellness program integration, will understate the premium impact.

Patterns we have seen in recent employer data suggest that adherence correlates with cost-sharing design and plan communication. Employers that actively promote GLP-1 coverage through wellness platforms and remove prior authorization friction tend to see higher persistence rates, pushing actual premium impact toward the upper end of the EBRI range. Plans with high copays and restrictive step therapy requirements see lower uptake but also lower persistence among those who do start therapy.

Cost-Sharing Limits: $90 Copay Buys 1 to 2 Points

EBRI tested two cost-sharing levels: $0 copay (full employer/plan coverage) and a $90 copay per 30-day supply, reflecting a typical Tier 3 or specialty tier formulary design sourced from the KFF Employer Health Benefits Survey.

The $90 copay reduced premium increases by 1 to 2 percentage points across all scenarios. Under narrow eligibility with real-world adherence, the copay shaved 0.8 points (6.1% to 5.3%). Under broad eligibility with perfect adherence, it shaved 1.8 points (13.8% to 12.0%). The reduction is meaningful but cannot neutralize the effect of expanding eligibility or higher-than-expected adherence.

This finding has practical implications for benefit design. Employers considering aggressive cost-sharing as a primary strategy for controlling GLP-1 premium impact should understand that even a $90 monthly copay only buys a fraction of the savings that narrower eligibility criteria provide. Moving from broad to narrow eligibility under real-world adherence and $0 copay saves 4.3 points (10.4% to 6.1%). The $90 copay under the same broad eligibility saves only 1.4 points (10.4% to 9.0%). Eligibility criteria dominate cost-sharing in the EBRI framework.

The 57 Million Eligible Population Problem

The scale of the eligible population is what makes GLP-1 coverage fundamentally different from previous specialty drug categories. KFF estimates that 42% of non-elderly adults with private insurance, roughly 57.4 million people, are clinically eligible for GLP-1 drugs based on current FDA labeling. Among those with employer-sponsored coverage specifically, the eligible population is approximately 49.3 million, with 36.2 million qualifying on an obesity diagnosis alone.

Compare this to earlier specialty drug shocks. Hepatitis C direct-acting antivirals (Sovaldi, Harvoni) produced a one-time premium spike in 2014 to 2016, but the treatable population was capped at roughly 3.5 million Americans with chronic HCV. The GLP-1 eligible population is more than 16 times larger, and unlike HCV, GLP-1 therapy is intended as chronic, ongoing treatment rather than a finite cure.

Only 3% of non-elderly adults with employer coverage had a GLP-1 claim in 2022, according to KFF. The gap between the 3% current utilization and 42% eligible population creates the actuarial uncertainty. Small changes in uptake assumptions produce enormous swings in projected premium impact. If uptake moves from 3% to 6%, the premium effect roughly doubles. If it reaches 10% to 15%, driven by oral semaglutide availability, employer wellness program incentives, or cultural normalization, the premium impact could exceed even the EBRI upper-bound scenario for plans that define eligibility broadly.

The IFEBP 2025 Pulse Survey of 279 employers found that GLP-1 drugs already account for an average 8.9% of total annual claims, up from 6.9% in 2023. Over a quarter of employers reported GLP-1 costs exceeding 15% of annual claims. A Minnesota school district cited in BCBS data reported that GLP-1s comprised just 2% of prescriptions but 56% of total drug spending, illustrating the per-claim cost concentration that makes this drug class behave more like a catastrophic exposure than a standard pharmacy benefit.

Employer Coverage Decisions Are Fracturing

Employer responses to GLP-1 costs are splitting along size and industry lines, creating a fragmented coverage landscape that complicates the actuarial assumptions for any group pricing exercise. As we detailed in our GLP-1 trend factor framework, this fragmentation makes industry-average utilization data less reliable as a credibility complement for individual group pricing.

The KFF 2025 Employer Health Benefits Survey shows coverage rates diverging sharply by employer size. Among firms with 5,000 or more workers, 43% now cover GLP-1s for weight loss, up from 28% in 2024, a 54% increase in one year. Mid-size firms (1,000 to 4,999 workers) cover at 30%, while smaller firms (200 to 999 workers) cover at just 16%. Mercer's National Survey puts the large employer figure even higher at 49% for firms with 500 or more workers.

Among employers that do cover GLP-1s, cost management strategies are intensifying. The KFF focus group data, drawn from five groups covering more than 100 companies and 250,000 employees, found that 53% of covering firms have imposed specific conditions on GLP-1 access. Thirty-four percent now require lifestyle or clinical support programs before coverage approval, up from 10% in 2024. One employer in the KFF focus groups described GLP-1s jumping from "#32 in pharmacy spending to #1" after coverage was added, with year-over-year cost increases of 50%.

The Business Group on Health surveyed 105 large employers in early 2026 and found that while 72% intend to maintain GLP-1 coverage through 2027, a meaningful 10% plan to drop weight-loss coverage entirely, and 18% remain undecided. Nearly eight in ten employers across all surveys report GLP-1 drugs as a significant driver of rising health care costs. These coverage decisions are the demand-side variable that determines where a specific group lands on the EBRI premium impact spectrum: an employer adding GLP-1 weight-loss coverage in 2027 should be priced using the broad eligibility scenarios, while an employer restricting coverage to diabetes only sits in the narrow range.

Medical Cost Offsets: Real but Lagging

The EBRI study explicitly notes that its simulation does not model medical cost reductions from GLP-1 therapy, and for good reason: "these benefits would not be manifested immediately, and there is no evidence to suggest that the savings would fully offset GLP-1 prices." This framing is critical for renewal pricing. The drug cost is immediate and certain; the medical cost offset is delayed and uncertain.

Aon's January 2026 analysis of 192,000 GLP-1 users from a dataset of over 50 million commercial lives provides the best available offset data. For diabetes-indicated use, GLP-1 users showed medical cost growth 6 percentage points lower than non-users at 30 months, improving to 9 points lower among those with 80% or greater adherence. For weight-loss indications, the offset was smaller: 3 percentage points lower at 18 months, rising to 7 points with consistent use.

The BCBS study of nearly 1.5 million medical records documented meaningful clinical improvements among GLP-1 users maintained on therapy for two or more years: 45% lower risk of kidney failure, 34% lower risk of liver failure, and a 26% reduction in heart failure hospitalizations among diabetic patients. Female GLP-1 users showed 47% fewer major adverse cardiovascular events and roughly 50% lower ovarian cancer incidence.

These offsets are real but face three challenges for near-term pricing. First, they require sustained adherence over 18 to 30 months to materialize, yet most patients discontinue within the first year. Second, discontinuation reverses the clinical benefits: weight regain occurs rapidly, and cardiovascular risk factor improvements erode, meaning GLP-1s may need to be taken indefinitely to maintain the offset. Third, non-diabetic GLP-1 users actually showed 9% to 10% higher annual health care spending in the BCBS data before factoring in drug costs, driven by increased doctor visits and monitoring. The medical cost savings for the weight-loss population take longer to emerge and may never fully offset drug expenses at current pricing levels.

For renewal pricing through 2028, the conservative approach is to model GLP-1 as a pure cost add-on with no medical offset credit. For longer-range projections, a 50% to 75% credibility weight on emerging offset evidence, applied only to the subset of members with 12 months or more of continuous therapy, provides a defensible middle ground.

Stop-Loss and Self-Funded Plan Implications

The EBRI premium impact results translate directly into self-funded plan economics, where the employer bears the full claim cost below the stop-loss attachment point. A 6% to 14% increase in expected claims shifts the entire loss distribution rightward, increasing both the expected cost below the specific deductible and the probability of exceeding aggregate corridor limits.

Stop-loss carriers have already responded. Our analysis of stop-loss GLP-1 contract modifications at 2026 renewals documents the emerging landscape: lasers on identified GLP-1 claimants, carve-outs excluding weight-loss GLP-1 claims from the stop-loss contract, and raised specific deductibles for plans that add GLP-1 weight-loss coverage. For self-funded employers evaluating whether to add or expand GLP-1 coverage, the stop-loss repricing adds a second layer of cost that the EBRI model does not capture.

Self-funded plans pricing GLP-1 exposure should stress-test three scenarios aligned with the EBRI framework: a base case using narrow eligibility with real-world adherence (5% to 6% expected claims increase), a moderate case using narrow eligibility with higher-than-average adherence (7% to 8%), and an adverse case using broad eligibility (10% to 14%). Each scenario should be run through the plan's excess loss factor model to quantify the stop-loss rate impact at the current specific deductible.

Why This Matters for 2027 Renewal Pricing

Health actuaries pricing 2027 employer group renewals face the widest premium uncertainty band in a decade, and the EBRI simulation provides the framework for stress-testing it. The key modeling decisions, ranked by their impact on premium projections:

  1. Eligibility criteria definition. This is the single largest driver, adding 4 to 6 percentage points when broadened from diabetes/obesity to include overweight with comorbidities. The actuary must determine, plan by plan, which eligibility tier applies based on the benefit design and formulary language. Plans moving from no GLP-1 coverage to broad coverage in 2027 face the full 10% to 14% impact; plans already covering for diabetes that expand to weight loss face the incremental 4 to 6 points.
  2. Drug pricing assumptions. At current net prices ($617 to $766 per month), the impact is 3x to 4x higher than at a hypothetical $200 per month. Biosimilar entry will not provide commercial relief before 2031. The CMS bridge price of $245 per month applies only to Medicare and does not directly reduce employer plan costs, though it may exert indirect pressure on PBM negotiations. Segal's analysis warns that manufacturers may offset Medicare price concessions with higher commercial pricing or reduced rebates.
  3. Adherence persistence. Real-world versus perfect adherence shifts premiums by 2 to 3.4 points. The actuary should evaluate plan-specific factors that influence persistence: cost-sharing level, prior authorization requirements, wellness program integration, and workforce demographics. Younger, higher-income workforces with $0 copay designs will skew toward higher persistence.
  4. Cost-sharing design. The $90 copay buys 1 to 2 points of premium reduction. Higher copays reduce uptake and persistence but may create adverse selection if healthier employees with lower severity opt out while sicker patients absorb the copay to maintain therapy.

For actuaries working with the GLP-1 credibility challenges in ACA rate filings, the EBRI framework provides a useful complement. Individual market filings face the same uncertainty band, amplified by the inability to restrict eligibility through plan design the way employer plans can.

The bottom line: the EBRI simulation confirms that GLP-1 coverage is not a single-point pricing input. It is a scenario analysis requiring explicit assumptions about eligibility breadth, drug cost trajectory, adherence patterns, and cost-sharing design. Actuaries who embed a single "GLP-1 trend factor" into their renewal projections without stress-testing these four dimensions will understate the uncertainty range by a factor of three.

Further Reading

Sources