OBJECTIVES: Most copayment waiver (value-based benefit design) programs have been applied at the individual level.  In this study we evaluate the impact of a family-based copayment waiver at a large employer. METHODS: Enrollees with diabetes in eligible health and all of their family members (regardless of health status) were automatically enrolled in a copayment waiver ($0 copay) benefit beginning January 2011 for diabetes, cardiovascular, and lipid lowering medications, screenings, and related medical services.  The study included 708 enrollees who were propensity score matched to a comparison group (total n=1416) within nine similar companies without these benefits.  An enrollee-calendar quarter panel data set was constructed from 2009-2011. Program impact was measured as the change in outcomes (medication adherence and healthcare spending) post-program in the copayment waiver group relative to the change in the comparison group (difference-in-differences). Adherence was defined as percent of days covered by a medication class greater than or equal to 80%.  A falsification test of adherence to asthma and migraine medications, where copayments did not change, was conducted. RESULTS: Prior to program implementation, enrollees in the value-based program had a similar level of adherence to diabetes medications than the comparison group (p=0.15).  After the program, percent adherent grew 29.7% over baseline (p<0.01) net of trends in the comparison group.  A smaller impact was observed for cardiovascular medications.  Total spending (employer spending plus patient out-of-pocket spending) in the value-based program group was no different than the comparison group (p=0.11).  Falsification tests of asthma and migraine medication utilization, showed no significant impact (p>.50). CONCLUSIONS: Results through the first twelve months of the program show that waiving copayments for all family members of a patient with diabetes can improve adherence to diabetes and cardiovascular services, which can lead to improvements in health outcomes.