10 Compliance Considerations for a Weight Health HRA

GLP-1 coverage has reached a pressure point for employers. Nearly 8 in 10 employers say medications are increasing their healthcare costs, while 67% currently cover GLP-1 medications for weight management. Of those, only 72% expect to continue that coverage in 2027. 

Naturally, employers are looking for ways to make the cost sustainable. Mercer reports that 27% of large employers have tightened GLP-1 utilization controls in 2026 or plan to do so in 2027, as benefits teams take a closer look at who receives coverage and how those dollars are spent.

A Weight Health Health Reimbursement Arrangement (“HRA”) offers another way to manage this growing cost, giving employers a defined budget for weight-health support rather than absorbing the full cost through their medical or pharmacy plan.

As more employers explore this approach, compliance needs to be part of the conversation. Employers and their benefits advisors need to understand how tax rules, ACA requirements, HSA eligibility, ERISA, HIPAA, and other regulations shape the design and administration of a Weight Health HRA.

What is a Weight Health HRA? 

A Weight Health HRA is an employer-funded Health Reimbursement Arrangement that reimburses eligible weight-health medical expenses, such as prescribed GLP-1 medications and associated dispensing fees.

Employers determine how much they contribute toward the HRA and make several decisions about how the benefit will operate, including:

• Which medications are eligible, such as Wegovy or Zepbound
• Whether spending is restricted to approved pharmacies or providers
• How employees will substantiate eligible expenses
• How frequently the benefit is funded

These design choices give employers more control over GLP-1 spending. But as an employer-sponsored health plan, a Weight Health HRA also comes with important  compliance considerations, which Benepass helps support. 

10 compliance considerations for a Weight Health HRA

Here are 10 compliance considerations to address when setting up a Weight Health HRA. They span several areas of federal benefits law, with implications for plan design and ongoing administration. 

1. Define which expenses qualify for tax-free reimbursement

Weight Health HRA reimbursements can be tax-free when they cover qualified medical expenses. For weight-loss treatment, the IRS confirms that expenses can qualify when they're used to treat a specific disease diagnosed by a physician, including obesity. Weight-loss expenses for general health or appearance don't qualify on the same basis.

Employers should translate this rule into clear HRA eligibility criteria. For a GLP-1 program, employers may require:

• A valid prescription for an eligible GLP-1 medication
• Clinical documentation establishing that the treatment meets the plan's eligibility criteria
• A receipt or other proof of the eligible expense

Employee self-attestation alone doesn’t meet the IRS’s rules for substantiation. Setting these requirements upfront gives the plan a consistent basis for deciding which expenses receive tax-free reimbursement. 

2. Integrate the HRA with qualifying medical coverage

A Weight Health HRA can't operate as a standalone health plan. To satisfy Affordable Care Act (ACA) market reform requirements, employers must integrate the HRA with qualifying employer-sponsored group major medical coverage. Benepass helps to confirm employees are enrolled in qualifying group medical coverage whether sponsored through that employer or another. 

Applicable ACA market reform failures can trigger an excise tax of $100 per affected individual for each day of noncompliance, making integration an important part of the HRA's initial design. 

3. Protect HSA eligibility for HDHP participants

Employers must consider how a Weight Health HRA interacts with Health Savings Account (HSA) eligibility. Under IRS rules, an employee enrolled in a high-deductible health plan (HDHP) can't contribute to an HSA if they have other medical coverage before they meet the statutory minimum deductible.

Employers have two options for employees to maintain HSA eligibility:

• Use a post-deductible HRA: The Weight Health HRA begins reimbursing expenses after the employee meets the statutory minimum HDHP deductible. In 2026, this is $1,700 for self-only coverage and $3,400 for family coverage.
• Exclude HDHP/HSA participants: Employers can exclude these employees from the Weight Health HRA and communicate the eligibility rules during open enrollment, so employees can make informed decisions.

A post-deductible approach also requires employers to confirm when the applicable deductible has been met, which may be confirmed through requiring an Explanation of Benefits (EOB) from employees.

4. Put ERISA plan documents in place

A Weight Health HRA is an employer-sponsored group health plan subject to the Employee Retirement Income Security Act (ERISA). Under ERISA, employers must maintain a written plan document and provide employees with a Summary Plan Description (SPD) explaining how the benefit works.

The documentation should clearly set out:

• Who is eligible to participate
• Which expenses qualify for reimbursement
• How much the HRA will reimburse
• Any restrictions on approved pharmacies or providers
• How employees submit claims and appeal denied reimbursements

Clear documentation gives employees a reliable source for understanding their coverage and provides the rules administrators need to follow when operating the plan.

5. Follow ERISA claims and appeals procedures

Employers also need a compliant process for handling Weight Health HRA claims and appeals. 

ERISA claims procedure rules require plans to:

• Provide benefit determinations within the applicable timeframe
• Explain the specific reason for a denied claim and reference the relevant plan provisions
• Identify any additional information the employee needs to provide
• Explain how the employee can appeal the decision

HRA reimbursement requests are treated as ERISA benefit claims. If a claim is denied, for example if the medication isn’t eligible or the employee hasn’t used an approved pharmacy, the employee must receive information outlining the decision and be given the opportunity to appeal it. Employers should document this process and apply it consistently to Weight Health HRA claims.

6. Account for COBRA

Weight Health HRAs are group health plans, which are generally subject to COBRA continuation coverage. This means that employees and other qualified beneficiaries may continue their HRA coverage after certain qualifying events, such as termination of employment. 

Employers should:

• Include the Weight Health HRA in applicable COBRA election notices
• Establish an appropriate premium for continued HRA coverage
• Incorporate the HRA into their existing COBRA administration process

Employers should account for these requirements during HRA setup, rather than treating COBRA as a consideration that begins when an employee leaves the plan. 

7. Protect PHI and execute appropriate BAAs

Weight Health HRAs can involve sensitive health information, including prescriptions, providers, and details about obesity or diabetes treatments. Under HIPAA, employers can’t freely access Protected Health Information (“PHI”) simply because they sponsor the plan.

Employers should establish controls around who can access PHI and how they can use it for plan administration. Plan documents must also reflect the applicable restrictions on employer access. 

Third-party vendors that create, receive, maintain, or transmit PHI on behalf of the plan typically qualify as business associates. Employers should put a Business Associate Agreement (BAA) in place with these vendors to define how to handle and protect PHI. 

8. Apply §105(h) nondiscrimination rules

Weight Health HRAs are subject to Section 105(h) nondiscrimination rules preventing self-insured medical reimbursement plans from favoring highly compensated employees in their eligibility or benefits.

If a plan fails nondiscrimination testing, reimbursements received by highly compensated employees can become taxable. Employers should test their Weight Health HRA regularly and review the plan whenever they make significant changes to eligibility or benefit levels.

9. Avoid creating an ADA wellness-program 

Employers may require medical information to establish eligibility for Weight Health HRA reimbursement, but they need to consider how they collect it.

The Americans with Disabilities Act (ADA) restricts disability-related inquiries and medical examinations. Requiring employees to complete health risk assessments, biometric screenings, or lab work to access GLP-1 reimbursement can raise questions about whether participation in a wellness program is genuinely voluntary.

Employers can consider alternative ways to establish eligibility without collecting disability-related information directly.

10. Account for PCORI fees 

As Weight Health HRAs are a self-insured group health plan, the employer may be responsible for reporting and paying Patient-Centered Outcomes Research Institute (PCORI) fees.

Employers should determine whether introducing a Weight Health HRA creates an additional PCORI fee obligation. In some cases, multiple self-insured arrangements can be combined for fee calculations when they share the same plan sponsor and plan year.

Employers should confirm the applicable participant-counting method and add any required filing and payment deadlines to their compliance calendar.

Take control of your weight-health strategy with Benepass

Benepass is a flexible benefits platform that enables employers to manage pre-tax accounts, HRAs, and customizable spending programs in one place. For weight health, employers can use Benepass to administer a Weight Health HRA while retaining control over how they fund GLP-1 and other eligible support.

Administer your Weight Health HRA with confidence

Benepass enables employers to use an ERISA-governed HRA for eligible weight-health medical expenses. The platform supports key elements of HRA administration and compliance, including:

• Medical plan enrollment verification for ACA integration purposes
• Post-deductible HRA administration 
• Plan documents and SPDs
• Claims and appeals
• PHI protection and BAAs
• Annual nondiscrimination testing
• Annual reminders about PCORI fees

Control where your GLP-1 dollars go

Unlike a standard Rx savings card, Benepass lets employers set tighter parameters around where their weight-health budget is spent. Employers can:

• Define which medications are covered
• Restrict spending to approved merchants such as LillyDirect and NovoCare, with purchases elsewhere declined
• Add merchants of your choice, such as Ro or Hims & Hers, subject to program design and eligibility rules
• Extend support to options such as Noom or WeightWatchers
• Set a defined contribution to keep employer costs predictable

Bring weight health into the wider benefits wallet

Employees access their Weight Health HRA alongside their other Benepass benefits rather than navigating another standalone platform. They can manage HRAs, pre-tax accounts, and customizable spending programs in one place and understand when eligible weight-health expenses may also be paid with HSA or FSA funds.

Employers gain greater control over GLP-1 spending while employees have one place to manage the benefits available to them.

To learn more, access our webinar “GLP-1 Demand is Here: How Employers Can Offer Access Without Driving Up Costs.” Benepass and Sequoia will walk through the compliance considerations involved in designing your weight-health program. 

Disclaimer: The information is provided for general informational purposes and does not constitute legal, tax, or other professional advice. Furthermore, this post does not establish an attorney-client relationship.  Employers should consult qualified legal counsel regarding their specific plan design and compliance obligations.