What Is a Formulary? Drug Tiers, Limits, and Exceptions

A formulary is a list of the prescription drugs your health plan covers. It is also called a drug list. Your doctor can prescribe a drug that is not on the list, but your plan may not pay for it.

Every plan has its own formulary, and the list can differ even between two plans from the same insurer. When you check coverage, use the formulary for your exact plan. The formulary can also show your share of the cost for each drug and any rules that come with it. Those rules are covered below.

Many formularies use tiers, which are levels. When a plan uses tiers, it groups prescription drugs by type or cost, and the amount you pay is different for each tier. How many tiers there are, what goes in each one, and how much each costs you depend on the plan. Check your plan's documents instead of assuming.

Three kinds of drugs show up on most lists.

Being on the formulary does not always mean you can fill the prescription right away. Plans can attach rules to a covered drug. Federal rules for plans that must cover essential health benefits refer to all three.

These rules are decided plan by plan. Your formulary or plan documents should list which drugs have which rules.

Check before you enroll, when your plan renews, and when a doctor prescribes something new. For plans that must cover essential health benefits, which means non-grandfathered individual and small-employer insured plans, federal rules require the plan to publish its formulary on its public website. You should not need an account or a policy number to see it. It must include any tiers and restrictions, and make clear which plan each list belongs to.

Large employer plans, self-funded employer plans, and other plan types may follow different rules, so look for the formulary through your member portal or ask your plan or your employer's benefits office.

A formulary exception is a request for your plan to cover a clinically appropriate drug it does not otherwise cover. Under federal rules (45 CFR 156.122), non-grandfathered individual and small-employer insured plans, the ones that must cover essential health benefits, must have this process. You, someone you name, or your prescriber can make the request.

The standard request gets a decision within 72 hours of the plan receiving it. If approved, the plan covers the drug for the duration of the prescription, including refills. If your health could be seriously harmed by waiting, or you are already on a current course of treatment with a non-formulary drug, you can ask for an expedited review, with a decision within 24 hours.

If the plan denies the request, you can ask for review by an independent review organization. That decision is also due within 72 hours for a standard request and 24 hours for an expedited one. A state can accept its own appeal process in place of this one if it is at least as strict. Other plan types, such as large employer plans, may have different appeal rules, so read your plan documents.

Yes. Florida Statute 627.42393 covers step-therapy protocols, which are written rules that set the order in which drugs or treatments must be tried. It applies to health insurers, and to pharmacy benefit managers acting for them. Self-funded employer plans (ERISA) are regulated federally, not by Florida, so this law does not govern them. Ask your employer's benefits office whether your plan is self-funded or insured.

Under the statute, an insurer's major medical policy cannot require step therapy for a covered drug if you were already approved for that drug through step therapy under a different health coverage plan, and you provide documentation from that plan showing it paid for the drug in the 90 days right before your request. Insurers must also publish a process on their website, and give it to you in writing, for you or your provider to request an exemption from step therapy and to appeal a denial. A denial must give a written reason, the clinical rationale, and how to appeal.

The law does not require an insurer to add a drug to its formulary or to cover a drug it does not otherwise cover. This is a summary, not legal advice. Talk with an attorney about a specific dispute.

Three practical points can change your experience at the pharmacy.

If you take a regular medication, the formulary is one of the first things to look at when you compare plans. A licensed advisor at Prime Health Consultants can explain how to read a formulary, what questions to ask, and how to compare the details in plan documents. Advisors explain options in English and Spanish.

If a drug was denied, an advisor can explain the claims and appeals process and guide you through the steps when you need it. That is guidance only. It is not legal advice, and it is not representation.