Obesity in Canada
In Canada, obesity is generally not recognized as a disability or a protected ground under the Human Rights Act. However, it is increasingly being recognized as a chronic disease rather than merely a lifestyle issue. Obesity can lead to various health conditions, including type 2 diabetes, cardiovascular disease and osteoarthritis. It currently affects nearly one in three Canadians—an increase from one in five in 2003.
The economic impact of obesity is substantial, costing the Canadian economy $27.6 billion annually. Workplace productivity losses are three times higher than direct healthcare costs.
Obesity is a chronic, lifelong condition that arises from complex interactions among biological, genetic, and environmental factors. It can worsen over time and often requires ongoing treatment through a combination of dietary changes, physical activity and in some cases, medical or surgical interventions.
Coverage Limitations in Current Benefit Plans
Since obesity is not classified as a disability, employers currently have discretion over whether to include weight-loss medications in their benefit plans. Fewer than 20% of Canadians with private drug plans have access to obesity treatment medications. This is due to two main reasons. First, there is a stigma associated with obesity, stemming from the inaccurate belief that body size is solely a result of personal choices or a lack of willpower—therefore making medication seem unnecessary. Second, the cost of obesity medications is high.
Most insurance companies do not include weight-loss medications in their standard drug formularies. However, coverage can be added if the employer agrees to an increase in their health premiums. For example, one insurer, RBC Insurance, charges an additional 5% to the health rate to add a $5,000 per person annual weight-loss drug maximum to a health plan.
Currently, five medications are approved by Health Canada for the treatment of obesity:
- Saxenda (liraglutide)
- Wegovy (semaglutide)
- Mounjaro (tirzepatide)
- Contrave (naltrexone/bupropion)
- Xenical (orlistat)
These medications can cost upwards of $5,000 per year per person.
Making the Business Case for Coverage
When deciding whether to include weight-loss medications in a benefit plan, employers should consider the potential return on investment. Coverage can reduce costs in other areas, such as medications for diabetes and heart disease. It can also improve employee well-being, morale, and productivity. To manage costs, insurers can implement protocols such as prior authorization, where employees must meet certain criteria—such as a specific Body Mass Index (BMI)—to qualify for coverage. Additionally, cost containment strategies such as annual maximums or co-insurance (requiring employees to share in the cost) can be put in place.
If you have any questions about adding weight-loss medications to your benefit plans, please contact your Baynes & White consultant.