As companies in America face rising health costs, Starbucks ends employee benefits' coverage for these medicines
Starbucks has announced that it will stop covering the GLP-1 medications prescribed for weight loss under its employee health plans starting October. According to a report by Business Insider, the Seattle-based coffee chain has confirmed that while the drugs may still be covered for other conditions such as diabetes, they will no longer be included for weight-loss purposes.
Starbucks provides health benefits to full- and part-time employees working at least 20 hours a week.Reason behind Starbucks pulling back coverage for weight-loss drugsThis move by Starbucks reflects a broader trend among US employers recalibrating benefits as spending on GLP-1 drugs surges. Originally developed for diabetes, these medicines have become popular for obesity treatment.
According to the International Foundation of Employee Benefit Plans, GLP-1 drugs accounted for 11.4% of corporate employers’ total annual claims in 2025, up from 6.9% in 2023. Average health-benefit costs per employee rose 6% last year and are projected to climb another 6.7% this year, with GLP-1 usage cited as a major driver.Other large employers have also pulled back coverage.
As per the Business Insider report, Allina Health ended GLP-1 coverage for weight loss in January 2025, citing rising premiums, while PwC has reportedly made similar changes. At the same time, some companies are doubling down: Bank of America CEO Brian Moynihan recently said the bank spends more than $250 million annually on GLP-1 coverage, viewing it as an investment in employee health.Starbucks discontinued its AI inventory toolIn related news, in May this year, Starbucks announced that it is discontinuing its AI-powered inventory management tool.
According to a Fortune report, the company decided to stop using the system after employees raised concerns about its accuracy. The tool, developed by NomadGo, was introduced in September last year to automatically count inventory items such as milk and syrups and help stores manage stock levels. However, workers said the app often made mistakes, leading to operational problems.
According to Carl Addison, a Starbucks shift supervisor in Washington state, the system required stores to reorganise storage areas, adding extra work for employees. “The app’s inaccuracies made employees’ workflow more challenging,” Addison told Fortune.Get the latest technology news and updates. Download the TOI App.