The Compliance Trapdoors in GLP-1 Coverage Strategies

The Compliance Trapdoors in GLP-1 Coverage Strategies

A closer look at HRAs, savings cards, compounded GLP-1s, and the regulatory risks facing self-funded employer health plans looking for GLP-1 coverage options.

Executive Summary

  • Employers face rising demand for GLP-1 medications.
  • Many cost-containment strategies introduce IRS, ACA, and manufacturer compliance risk.
  • Funding mechanisms such as HRAs, HSAs, and savings cards may create regulatory exposure.
  • Compounded GLP-1s introduce safety and legal uncertainty.
  • Self-funded employers should evaluate GLP-1 strategies through a compliance and long-term risk lens.

Employers today are facing unprecedented demand for GLP-1 medications, but have very little clarity on the best way to address this demand. The market is crowded with new programs, savings tools, and point solutions, all claiming to solve the same problem: how to make GLP-1s affordable without blowing up pharmacy spend. PBMs, digital health vendors, manufacturers, and DTC platforms are all offering different pathways, often with overlapping or conflicting claims. As a result, many employers feel stuck between imperfect options, such as maintaining the status quo, excluding GLP-1s from coverage altogether, or moving quickly into new offerings without fully understanding the downstream risk.

Based on how the GLP-1 benefits market has evolved, several patterns have emerged:

  • Employers are hesitant to disrupt existing PBM arrangements due to concerns about rebates and financial guarantees
  • Many are turning to savings cards, HRAs, HSAs, or other indirect funding mechanisms to help employees access self-pay pricing
  • Some are exploring compounded GLP-1s as a lower-cost alternative
  • Others opt out entirely, despite growing employee demand and evidence for long-term health benefits 

Individually, each of these approaches may appear reasonable. Taken together, they reflect a market searching for answers, without a clear framework for evaluating compliance, clinical quality, and employer risk. Before employers can decide which GLP-1 strategy to adopt, it’s critical to understand what’s structurally wrong with many of the options currently being offered.

The Three Structural Risks in Employer GLP-1 Coverage Strategies

1. Funding Mechanism Risk

Seeding HRAs, FSAs, or HSAs specifically for GLP-1s creates compliance risks. Many employers assume that seeding HRAs, HSAs, or FSAs to help employees purchase GLP-1s through DTC channels, like NovoCare or LillyDirect, is a safe workaround. However, it is not. This method creates IRS, ACA, ICHRA, and QSEHRA compliance questions, exposing employers to misuse and audit scrutiny. By going this route, employers may be taking on outsized regulatory liability for marginal drug savings. 

Prescription savings cards also cannot be designated for specific medications. Similar to HSAs and FSAs, employees may use these cards for prescriptions beyond GLP-1s, even if the employer’s intent is more narrow. In addition, manufacturers have indicated that employer-facilitated access to certain DTC pricing programs may violate program terms and conditions. As scrutiny increases, manufacturers may begin policing member access more closely, creating additional uncertainty for employers relying on these mechanisms.

2. Manufacturer Program Conflict Risk

Employees are forced into ethically and legally gray behavior. Many manufacturer self-pay GLP-1 programs require individuals to attest, as part of their terms and conditions, that they are not receiving employer-sponsored financial assistance for the medication. When employers encourage employees to access these programs while simultaneously providing financial support (through methods such as seeded accounts), employees may be required to certify that no such assistance exists. This creates a disconnect between employer intent and manufacturer rules, placing employees in a difficult position and introducing compliance uncertainty for the employer.

3. Compounding and Regulatory Risk

Compounded GLP-1s introduce legal and safety uncertainty. Some employers may turn to compounded GLP-1s to save money. However, these products are continuing to face increasing FDA scrutiny. Most recently, Wegovy manufacturer Novo Nordisk has filed a lawsuit against Hims & Hers over allegations of compounding semaglutide pills and selling them at a lower price. As regulatory scrutiny and litigation evolve, employers relying on compounded GLP-1s may face disruption in access, quality concerns, and increased legal exposure. Safety is also a major concern here. The FDA has received hundreds of reports of adverse events associated with compounded versions of semaglutide and tirzepatide, and notes that compounded GLP-1 products are not evaluated for safety, effectiveness, or quality in the same way as FDA-approved medications, meaning patients may face increased risk of adverse effects and medication errors.

What Is a Compliant GLP-1 Coverage Strategy?

A compliant GLP-1 strategy for self-funded employers:

  • Aligns with IRS and ACA regulations
  • Complies with manufacturer program terms
  • Avoids employee attestation conflicts
  • Does not rely on unstable regulatory pathways
  • Preserves fiduciary and plan governance integrity

As employers rush to respond to rising demand for GLP-1s, many of the well-intentioned cost-containment strategies are introducing compliance and legal risk. What appears to be a financial workaround can quickly become a regulatory trapdoor, especially when funding mechanisms manufacturer rules are constantly in flux. Sustainable GLP-1 coverage demands a strategy grounded in compliance, clinical integrity, and long-term employer risk management.