Are Group Health Plans that Cover Weight Loss Drugs Breaching their ERISA Fiduciary Duty by Not Offering Diet and Exercise Programming?

Are Group Health Plans that Cover Weight Loss Drugs Breaching their ERISA Fiduciary Duty by Not Offering Diet and Exercise Programming?

What do Ozempic, Wegovy and Rybelsus all have in common? They are all FDA-approved weight loss drugs that all belong to a class of medications known as “glucagon-like peptide-1 (GLP-1). They all contain semaglutide, which mimics the GLP-1 hormone to produce more insulin, reduce blood sugar and in higher amounts, reduce appetite. But the most interesting commonality between these weight loss drugs is that they ALL available only by prescription and work only as an adjunct to diet and exercise. That is, the FDA approved these drugs on the condition that they would be obtained pursuant to a legal prescription and used alongside diet and exercise, not as a standalone treatment for diabetes and/or obesity. Manufacturer instructions for use of these GLP-1 medications also specify that the weight loss drug is to be used as an “adjunct to diet and exercise.”  A recent discussion between Wellness Law and Quizzify revealed that some group health plans may be in breach of their ERISA fiduciary duty by failing to offer lifestyle management programming in conjunction with GLP-1 medications.

It could be argued that group health plans that cover GLP-1 drugs and do not also provide lifestyle assistance are violating their fiduciary duty of prudence to plan beneficiaries. Breaching such fiduciary duties violates the Employee Retirement Income Security Act (ERISA) and could lead to lawsuits. Specifically, ERISA § 404(a)(1)(B) requires fiduciaries to act “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” That is, an ERISA fiduciary, which according to the US Department of Labor is defined as “a person using discretion in administering and managing a plan or controlling the plan’s assets,” must act with care when providing benefits to plan participants. Persons acting with discretion regarding the group health plan can include not only the employer sponsor, but anyone with delegated discretionary authority regarding plan administration, such as third-party administrators (TPAs) or pharmacy benefit managers (PBMs). Acting with care arguably includes offering benefits in accordance with FDA approval and manufacturer instructions. Offering a benefit that flouts manufacturer instructions and FDA approval is arguably reckless and not in the care or best interest of plan beneficiaries. Furthermore, studies have shown that diet and exercise is key to successful, healthy weight loss.

Following manufacturer instructions as a legal requirement is not unusual. For example, laboratories that are eligible for a certificate of waiver under CLIA must following the manufacturers’ instructions for performing lab tests. 42 CFR § 493.35-493.39. Thus, if the manufacturer’s instruction for use of the weight loss drug indicates that it is intended to be used in conjunction with diet and exercise, then there should be no discretion on the part of the group health plan to decide whether to offer diet and exercise programs as a prerequisite to access the drug. That is, once the employer decides to cover the weight loss drug, the offering of lifestyle programs should be automatic under the ERISA fiduciary standard.[1]

Failure to meet ERISA fiduciary standards can lead to employee lawsuits, such as the one recently filed in the U.S. District Court of New Jersey. On February 5, 2024, a class of plaintiffs sued Johnson and Johnson’s health plan for breaching its fiduciary duty of prudence for mismanaging Johnson and Johnson’s prescription drug benefits program.  Specifically, the plaintiffs are arguing that the plan’s mismanagement of the prescription drug program cost the plaintiffs more money than necessary. A recent analysis by the American Journal of Managed Care shows that employees are paying higher out-of-pocket costs for GLP-1 drugs than they do for insulin. If an employer does not ensure employees are using the GLP-1 drugs as intended (i.e., as an adjunct to diet and exercise), then the plan may be costing employees more money than necessary in the long run.

What Should Group Health Plans Do?

First and foremost, follow FDA approval guidelines and manufacturer instructions for GLP-1 medications, should you choose to cover them. Then, enlist the help of wellness vendors who can help you comply with those guidelines and instructions. Also, ensure your wellness program is compliant with workplace wellness rules that are often implicated. Good news on that: Wellness Law has developed a workplace wellness program compliance audit tool that you can use to flag possible compliance issues with your program. Download it today, and contact us with any wellness compliance needs.


[1] It is acknowledged that benefit package determinations are not ERISA fiduciary actions. See, at 4 (noting that determining the benefit package does not qualify as a fiduciary action but an employer business decision). However, an argument could be made that the benefit package determination in the case of covering weight loss drugs is the decision whether to cover the drug in the first instance. That is the business decision. Once the business decision is made to cover the drug, then the group health plan is obligated under its fiduciary duty to ensure that it is covered in accordance with FDA approval and manufacturer instructions.

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