Don’t build a benefits strategy around one drug class
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GLP-1s are the category every plan sponsor is watching. Aon Canada’s Joseph Koo on why the more useful conversation is about the whole drug plan − and the workforce health strategy around it
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SOMETHING’S SHIFTED in how Canadian plan sponsors talk about GLP-1 medications, and Joseph Koo noticed it almost immediately.
Two years ago, the question coming across his desk was whether to cover these drugs at all. Today, that conversation has moved on.
“They want to know, ‘how do we cover this well while keeping the drug plan sustainable?’” says Koo, assistant vice president, health solutions at Aon Canada. “That’s a completely different, and arguably richer, dialogue.”
A pharmacist by training, Koo has spent his career at the intersection of patient access and group benefits. At Aon, his role is to provide pharmacy advisory to the practice and to clients, which means he’s had a front-row seat as GLP-1 medications became one of the most consequential topics in Canadian benefits management.
The employers who get this right, he stresses, won’t be the ones who cover the most or the least.
“They’ll be the ones who pair coverage with the right plan design and member support − turning drug spend into health outcomes. Not cost, but outcome end to end.”
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“The tipping point is already behind us. When a single therapy area covers that much ground, it stops being a line item. It becomes a workforce health decision”
Joseph Koo, Aon
No longer just another line item
GLP-1 medications were originally developed for type 2 diabetes. They now carry approved indications across obesity, cardiovascular disease, kidney disease, and sleep apnea. The next generation of these drugs is being developed against multiple conditions from the outset, with a pipeline that will only broaden the category’s already wide reach.
While Koo is clear that the long-term story is still being written, Aon sees the multi-indicational use play out in its research. He points to Aon’s recent analysis of 50 million insured lives. The study found a 44 percent reduction in major cardiovascular events among the 140,000 GLP-1 users compared to non-users, and that finding underscores the point: this drug class touches the most common chronic conditions in a working-age population.
There’s one thing Aon is certain of: GLP-1s are not a checkbox trend to observe and move past. So, when does its inclusion stop being a benefits question and start being a workforce strategy question?
“The tipping point is already behind us,” Koo states. “When a single therapy area covers that much ground, it stops being a line item. It becomes a workforce health decision.”
What your drug plan says about you
That decision starts with plan design. The real conversation lies not in the medication but in a plan’s overall philosophy. Coverage isn’t about any one specific drug; it’s about the signal its inclusion or exclusion sends. Despite the lack of hard evidence of direct causation between GLP-1 inclusion and key measurements like higher retention rates, employers should be intentional about what their benefit plan design communicates.
Because GLP-1 is a hot topic right now, the instinct is to zoom in on it specifically. Koo argues, however, that the more useful move is to zoom out.
“An employer’s approach here will tell current and prospective employees what they value in their workforce and how they go about promoting health within it,” he says. “A gap − decisions not to cover certain drugs or conditions − will also tell those employees and prospects something.”
Building a credible coverage philosophy is where the real work lies, and Koo’s advice is for employers to start looking at the drug plan the way they would view a financial risk portfolio. Where is the exposure concentrated? What’s the risk and financial tolerance? What kinds of structures would help manage the extremes of outcomes, rather than assuming the plan manages itself claim by claim?
Getting that philosophy right means looking beyond the drug itself. GLP-1s are the start of the intervention, not the whole intervention, Koo explains. Traditional drug plan levers such as prior authorization, quantity and dose limits, renewal criteria, and wrapping member experience with support and follow-up coaching, are still meaningful. But nothing happens in isolation. At Aon Canada, he says, “we don’t believe drug benefits should be looked at in silo from everything else.”
“Prior authorization arguably does its job of getting the right drug to the right patient,” Koo acknowledges. “However, prior authorization on its own doesn’t control costs, and that’s where plan design and financial risk thinking have to work together.”
Equally important is how employers engage members once a drug is covered. Proactive member support, not passive digital tools, is what moves the needle on adherence. Claims data consistently shows that members almost never book their own consultations, for example.
“The impact lives in reaching out to those members who are actually taking these drugs,” Koo says. “That’s why insurers, carriers, and their network of providers can help support that.”
Outcome, not output
Any savings to be had don’t arrive automatically, and they depend entirely on plan design. Generic semaglutide is now approved in Canada, for example, and savings opportunities are emerging, primarily on the diabetes side, with weight management still to follow. But cutting costs isn’t the end goal when it comes to delivering real change within a workforce. What employers do with those savings matters as much as capturing them.
“If employers reinvest into the supportive layer − adherence, coaching, benefit activation, health campaigns, mental health prevention − then arguably they make all the remaining drug dollars work harder,” Koo says. “One aspect is a savings story. The other piece is an opportunity about the value of investment.”
The caveat, however, is that reinvestment makes sense only if employers can measure whether it’s working. That’s where most organizations have ground to cover.
Koo frames the practical test simply: can an employer’s drug data talk to other metrics, such as disability and absence data? In most cases, the answer is no. Those datasets sit with different insurers, in different systems, with no direct connection between them.
“That integration is the real maturity marker because employers cannot answer the questions that matter most − does GLP-1 coverage reduce absenteeism or affect disability experience − because the data doesn’t meet,” he says, noting that member experience is equally undertracked. Are employers measuring how the pathway actually feels? Prior authorization turnaround takes time, and renewal friction is real.
“A plan can look really well managed on paper but still be failing the people using it,” Koo explains.
The bigger picture, he argues, is what separates employers who are genuinely moving on workforce health from those who have simply added a line item. Drug savings are one data point, but how does a 2 percent reduction in drug spend reflect on disability experience? On member engagement? On competitiveness within an industry?
“A plan can look really well managed on paper but still be failing the people using it”
Joseph Koo, Aon
At Aon Canada, those questions are answered by looking at the whole picture of drug, disability, paramedical, dental, and financial well-being together, not as separate workstreams.
“Health and financial well-being are two sides of the same employee: when people are healthier, their interests naturally extend to financial well-being, building wealth, protecting their family,” Koo says.
It’s a different destination entirely from simply adding a drug to the formulary. Getting it right demands an ongoing dialogue, one that starts with plan sponsors asking themselves what success looks like one, two, three years from now. Then, they can start building the data story that gets them there. That, he says, is what Aon is here for.
“At the heart of it, the openness of that conversation builds trust − and that trust is what allows an employer to make better decisions,” he says. “I encourage HR leaders to bring their questions and join us at the table.”
What employers should do next
GLP-1s are one category among many, and the drug plan is only one part of a workforce health strategy that also runs through disability, absence, mental health, and financial well-being. So the starting point for plan sponsors is not a decision about one particular drug class. Rather, it is about a reflection on their benefits plan that starts with three practical steps.
First, define the plan’s coverage philosophy − what it will support, based on what evidence, and for what purpose. GLP-1s and emerging GLPs may be testing that philosophy today, but other categories will test it tomorrow.
Second, assess the financial and human capital exposure at a portfolio level. Employers should understand where risks are concentrated, establish their financial tolerance, and determine which plan design and funding mechanisms would help manage costs and generate the desired health outcomes.
Third, decide in advance how potential savings will be used. Employers may choose to reduce overall spend or reinvest in other areas. The important point is to make those decisions intentionally and measure the resulting impacts.
Aon helps plan sponsors connect drug strategy, plan design, and workforce health data so that coverage decisions are financially sustainable, measurable, and aligned with the outcomes employers want to achieve. For employers ready to build that plan, Aon’s health solutions team can help.
Published Sep 14, 2026
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Source: MFAA
The health burden on employers
of Canadian adults aged 18 to 79 are classified as overweight or obese, up from 60% before the pandemic − with the sharpest increases among adults aged 18 to 39
68%
Untreated obesity costs Canada
$27.6B
Statistics Canada, Canadian Health Measures Survey
annually in combined direct healthcare and indirect productivity losses
Obesity Canada, peer-reviewed study
reduction in major cardiovascular events among 140,000 GLP-1 users compared to non-users
Aon’s analysis of 50 million insured lives found a
44%
of total drug spend
6.1%
Semaglutide remained the single largest drug expense on Canadian private plans in 2025, representing
IFEBP, July 2026
of annual employer claims in 2026
GLP-1 drugs accounted for an average of
11.1%
International Foundation of Employee Benefit Plans, July 2026
of Canadian employers now cover GLP-1 therapies for both diabetes and weight loss, up from 31% in 2025 and just 17% in 2024
37%
Canadian employer coverage is shifting
Medavie Blue Cross
