Prescription drug coverage is organized through a formulary that sorts medications into cost tiers. What a member pays depends on the drug tier, the plan deductible and coinsurance, and whether controls such as prior authorization or step therapy apply.
These are programs that stop manufacturer drug coupons from counting toward your deductible or out-of-pocket maximum. With an accumulator, coupon dollars don’t count; with a maximizer, the coupon’s value is spread across the year and also doesn’t count toward your limits.
Specialty drugs are high-cost medications for complex or chronic conditions (like cancer, autoimmune disease, or MS) that often need special handling or administration. They carry the highest formulary tier and are a leading driver of plan costs.
Starting in 2025, Medicare Part D caps what you pay out of pocket for covered prescriptions each year. The cap is $2,000 in 2025 and rises with inflation to $2,100 in 2026. After you hit it, covered drugs cost you nothing for the rest of the year.
Sometimes. Coverage of GLP-1 drugs for weight loss varies by employer and plan and is often limited or excluded due to cost. In 2025, about 19% of firms with 200+ workers (and 43% of those with 5,000+) covered them for weight loss. Original Medicare does not cover them for weight loss alone.
Generics are copies of conventional brand-name drugs with the same active ingredient and lower cost. Biosimilars are highly similar versions of complex biologic drugs. Both are FDA-approved and usually sit on cheaper formulary tiers than brand names.
Ask your plan for a formulary exception or prior authorization with your doctor’s supporting statement. If the plan still denies it, you have the right to an internal appeal and then an independent external review.
GLP-1 medications (such as semaglutide) are among the fastest-growing costs in employer drug plans. In 2025 they made up more than 10% of all prescription-drug claims in employer plans, with list prices over $1,000 a month before rebates. Employers are deciding whether to cover them for weight loss and, if so, how to manage use.
A pharmacy benefit manager administers the drug side of a health plan, building the formulary, negotiating with drug manufacturers and pharmacies, and processing pharmacy claims. PBMs strongly influence which drugs are covered and at what cost, and their pricing has drawn scrutiny for being opaque.
A formulary is the list of prescription drugs a plan covers, organized into tiers. Lower tiers (generics) cost you the least; higher tiers (preferred brand, non-preferred brand, and specialty) cost more. Placement reflects cost and clinical value, and formularies change over time.
Step therapy requires you to try a lower-cost drug first and show it didn’t work (or isn’t appropriate) before the plan will cover a more expensive alternative. It’s a utilization-management tool, and your prescriber can request an exception when stepping through isn’t medically appropriate.