March 9, 2016

[Infographic] What is a Tiered Formulary? (And Why your Company Should Use One)

March 9, 2016

Insurers are hiking pooling costs, and we don’t blame them. Don’t kid yourself: if you were about to write your name underneath a policy, I’d wager that you too would increase premiums. Our block at The Beneplan Employee Benefits Co-operative was hit hard in 2015 by several biologic drug claims. While drug companies are falling over themselves to acquire the rights of biologic drugs, plan sponsors and advisors are scrambling to react to this new normal.But what if we told you there’s a way to fight back against runaway costs on your employees drug benefits plan without compromising the care you provide them? This is called tiered drug formulary plan. A tiered formulary divides drugs into groups, primarily based on costs. The most generic drugs fall under the first tier and typically come at the lowest cost, while the expensive brand names take the upper tiers – which is partially covered by the employer and partially covered by the employee – or co-pay.The infographic below illustrates how a tiered drug formulary works and explains the plans many benefits

The Reformulary - Tiered Drug Formulary - Infographic - 01
The Reformulary - Tiered Drug Formulary - Infographic - 02

Insurers are hiking pooling costs, and we don’t blame them. Don’t kid yourself: if you were about to write your name underneath a policy, I’d wager that you too would increase premiums. Our block at The Beneplan Employee Benefits Co-operative was hit hard in 2015 by several biologic drug claims. While drug companies are falling over themselves to acquire the rights of biologic drugs, plan sponsors and advisors are scrambling to react to this new normal.But what if we told you there’s a way to fight back against runaway costs on your employees drug benefits plan without compromising the care you provide them? This is called tiered drug formulary plan. A tiered formulary divides drugs into groups, primarily based on costs. The most generic drugs fall under the first tier and typically come at the lowest cost, while the expensive brand names take the upper tiers – which is partially covered by the employer and partially covered by the employee – or co-pay.The infographic below illustrates how a tiered drug formulary works and explains the plans many benefits

The Reformulary - Tiered Drug Formulary - Infographic - 01
The Reformulary - Tiered Drug Formulary - Infographic - 02

Subscribe

Get curated insights from the health benefits space every month.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Other Great Reads

Why You Need a Tiered Benefit For Group Life Insurance

Jun 16, 2021

Which Third Party Administrator is Right For You?

Jun 16, 2021

How to Talk to Your Kids About Death

May 27, 2021

ASO: Is Self-Insurance Right For You?

May 19, 2021