Starbucks ends weight-loss GLP-1 coverage for employees as benefit costs rise

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Starbucks ends GLP-1 weight loss coverage

Highlights

Starbucks will eliminate health-plan coverage for GLP-1 drugs prescribed for weight loss starting October, maintaining coverage only for other conditions.
GLP-1 drugs represented 11.4% of employers' total annual health claims in 2024, up from 6.9% in 2023, as demand accelerates.
Mercer projects average health-benefit costs per employee to rise 6.7% in 2024, with GLP-1 usage a leading cost driver for employer plans.

Coverage change takes effect in October

As first reported by Business Insider, Starbucks confirms that benefits-eligible employees will no longer receive health-plan coverage for GLP-1 drugs prescribed for weight loss from October onward. The Seattle-based coffee chain says the medications may still be covered when prescribed for other conditions.

Starbucks offers health benefits to full- and part-time employees who work at least 20 hours a week. A company spokesperson confirms the decision and declines to provide further comment.

The change marks a reversal as employers face mounting costs tied to GLP-1 medicines, which were originally developed for diabetes and are now widely used in obesity treatment. Employers are increasingly tightening eligibility as demand for the drugs reshapes corporate health plans.

Employer health budgets face wider pressure

Data from the International Foundation of Employee Benefit Plans show GLP-1 drugs account for 11.4% of corporate employers' total annual claims last year, up from 6.9% in 2023. The nonprofit's 2026 survey also finds that 36% of corporate employers cover the drugs for both diabetes and weight loss in 2026, while 60% cover them only for diabetes.

Mercer says average health-benefit costs per employee rose 6% last year and are projected to increase 6.7% this year, with broader use of expensive GLP-1 medicines among the main drivers. Other employers have also pulled back, including Allina Health, which ended weight-loss GLP-1 coverage for employees and covered dependents in January 2025, citing pressure on medical premiums.

Some large companies continue to support obesity-related coverage. Earlier this week, Bank of America CEO Brian Moynihan says the bank spends more than $250 million a year on GLP-1 coverage for employees, about 13% of its more than $2 billion annual healthcare budget, and views the spending as an investment in employee health.

In our earlier article on the July 2026 U.S. jobs report, we explained that the drop in long-term unemployment largely reflected discouraged workers leaving the labor force rather than stronger hiring. We also noted soft job creation, low hiring rates, and falling participation as warning signs for household finances and the broader economic outlook.

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