This Just In ...

IRS Issues New Guidance on GLP 1 Coverage for Employer Health Plans

The IRS has released new interpretive guidance on the tax treatment and HSA compatibility of GLP 1 medications, a move that could significantly affect employer health plan design heading into 2026. The update, issued late last week, clarifies how plans may cover drugs such as Ozempic, Wegovy, and Zepbound when prescribed for obesity, diabetes, or metabolic conditions.

The most notable change: the IRS has confirmed that GLP 1 medications prescribed for obesity alone may now be treated as a medical expense for purposes of Section 213(d). This opens the door for broader coverage under employer health plans and may allow certain expenses to qualify for reimbursement through HSAs, FSAs, and HRAs — depending on plan design. The guidance also addresses a long standing gray area: whether covering GLP 1 drugs before a patient meets strict diagnostic criteria jeopardizes HSA compatible HDHP status. The IRS now states that preventive metabolic care programs that include GLP 1 prescriptions may be permissible, provided they meet specific clinical criteria and are not broadly available as first dollar coverage.

For employers, the implications are immediate. GLP 1 drugs remain one of the fastest growing cost drivers in health plans, and clearer federal rules will influence formulary decisions, wellness program design, and cost management strategies for 2026.

Benefits managers should review the new guidance with carriers and PBMs to determine whether plan amendments or employee communications are needed this quarter.

In this issue:

This Just In ... IRS Issues New Guidance on GLP 1 Coverage for Employer Health Plans

2026 Compliance Update: More on Last Month’s Key Regulatory Changes

How Employers Are Responding to Rising Employee Expectations in 2026

Telehealth in 2026: How Virtual Care Is Transforming Access, Quality, and Cost

What the Latest Surveys Reveal About Employee Expectations

The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher's permission. All rights reserved. ©2026 Smarts Publishing https://smartspublishing.com/ Tel. 877-762-7877.