Learn why employees struggle to understand prescription benefits and how better communication can reduce confusion and support requests.
Table of Contents
- Prescription benefits can be confusing for employees
- Prescription benefits are different from medical benefits
- The questions employees ask most often
- Where confusion usually begins
- How confusion affects employers
- Simple ways employers can make prescription benefits easier to understand
- What employees should know before they visit the pharmacy
- Clear communication helps employees use their benefits with confidence
- Key Takeaways
Prescription benefits can be confusing for employees
An employee walks into the pharmacy expecting to pick up a prescription and pay the usual copay. Instead, they find out the medication requires prior authorization, is not on the formulary, or costs much more than expected.
The next call often goes to HR.
The employee may think something is wrong with the plan, even when the benefit is working exactly as designed. The problem is that prescription coverage comes with rules employees may not know about until they try to fill a medication.
This confusion is not limited to pharmacy benefits. KFF found that 51% of insured adults have difficulty understanding at least one aspect of how their health insurance works. Among people with employer-sponsored insurance, 40% said it was difficult to understand what their insurance would and would not cover.¹
That can become especially noticeable during enrollment, when employees are processing information about premiums, deductibles, networks, medical coverage, prescription benefits, and other plan details at the same time.
Giving employees practical pharmacy information before they need it can help prevent some of those questions from becoming problems at the pharmacy counter.
Prescription benefits are different from medical benefits
Employees may understand that they have a deductible for medical care or that certain doctors are in network. Prescription coverage introduces another set of rules.
A few terms can make a significant difference in what happens when an employee fills a prescription:
- Drug formulary: The list of medications covered by the plan. Coverage and employee costs can vary depending on where a drug falls on that list.
- Pharmacy network: The pharmacies that participate in the plan. An employee's cost or coverage may differ when using an out-of-network pharmacy.
- Copays and coinsurance: A copay is typically a fixed amount, while coinsurance requires the employee to pay a percentage of the cost.
- Deductible: Depending on the plan, employees may need to meet some or all of their deductible before certain prescription benefits apply.
- Prior authorization: Some medications require approval before the plan will cover them.
- Quantity limits: A plan may limit how much of a medication is covered within a specific period.
- Step therapy: An employee may need to try another treatment before the plan covers a different medication.
Employees do not need to become pharmacy benefit experts. They do need to know that these rules exist, where to check them, and who can help when they have questions.
The questions employees ask most often
Prescription questions often start with a simple concern: "Why didn't this work the way I expected?"
Coverage and cost can play a major role in what happens after a prescription is written. A recent report found that 65% of prescriptions for newly launched medicines went unfilled during their first year on the market. On average, 49% were rejected by payers, while another 17% were abandoned after approval, likely because of high out-of-pocket costs.²
For employees, those barriers can quickly turn into questions about whether a medication is covered, why approval is required, how much they will pay, and whether another option is available.
Coverage
Is my medication covered?
Employees need to know where to check the plan's formulary and understand that being prescribed a medication does not automatically mean it is covered under their specific plan.
Cost
hy is my prescription more expensive than expected?
The answer could involve the deductible, coinsurance, the drug's formulary tier, the pharmacy used, or another plan rule. Employees should know where they can check their expected cost before filling a prescription when that information is available.
Pharmacy
Why does one pharmacy charge less than another?
A pharmacy's network status and the plan's pricing arrangements can affect what an employee pays. Employees should know how to check which pharmacies participate in their plan before assuming every location will produce the same result.
Approvals
Why does my medication need prior authorization?
Prior authorization means the plan requires certain clinical information and approval before it will cover the medication.
This process is a common source of confusion. A KFF poll found that 51% of insured adults had needed prior authorization for a service, treatment, or medication within the previous two years. Among those who encountered prior authorization, 47% said the process was somewhat or very difficult to manage.
Alternatives
Is there a lower-cost option?
Depending on the prescription and plan, there may be a generic, preferred medication, biosimilar, or other covered alternative. Employees should know whom to ask before changing medications, including their prescriber and the appropriate pharmacy benefit resource.
Where confusion usually begins
Many pharmacy questions can be traced back to how benefit information reaches employees.
Enrollment is one example. Employees may receive information about medical coverage, prescription benefits, dental and vision plans, payroll deductions, HSAs or FSAs, enrollment deadlines, and plan changes within a short period. Pharmacy details can easily get lost.
Other gaps are more specific.
An employee may know a formulary exists but have no idea where to find it. Another may recognize the term "prior authorization" without understanding what happens next. Someone else may assume that showing an insurance card means every prescribed medication will be covered.
Timing also matters. If employees first learn about formulary rules or prior authorization when a prescription is already waiting at the pharmacy, HR is explaining the benefit while the employee is trying to solve an immediate problem.
The better approach is to give employees a few pieces of pharmacy information they can use before that happens.
How confusion affects employers
A pharmacy question from one employee may take only a few minutes to answer. Repeated across a workforce, the same types of questions can create unnecessary work for HR.
Employees may contact HR about unexpected prices, coverage denials, pharmacy restrictions, or prior authorization because they do not know where else to go. Some issues may require additional calls between the employee, pharmacy, prescriber, health plan, or PBM before they are resolved.
Coverage questions can also affect how employees perceive their benefits. If someone expected a prescription to be covered and discovers otherwise at the pharmacy, the experience may feel like a plan problem even when the coverage rules were available beforehand.
These questions are happening while employers are preparing for continued cost pressure. A recent Business Group on Health survey found that employers expect a median 9.2% increase in healthcare costs in 2027, or 8% after plan design changes. Pharmacy now accounts for 25% of employers’ total healthcare spending, making prescription benefits a significant part of those cost conversations.³
Clear communication will not change the underlying cost of a medication. It can help employees understand how their benefit works, where to look for information, and where to go when they need help.
Simple ways employers can make prescription benefits easier to understand
You do not need to turn enrollment materials into a pharmacy benefits manual. Focus on the information employees are most likely to need.
Create a one-page pharmacy guide
Give employees a simple reference that answers practical questions: Where can I check whether a medication is covered? How do I find an in-network pharmacy? Who do I contact if a prescription requires prior authorization? Where can I check my cost?
Explain pharmacy terms in plain English
Employees are more likely to use information they can understand quickly. Instead of listing "formulary," "step therapy," and "quantity limits" without context, briefly explain what each term could mean when they fill a prescription.
Show employees where to find their covered drug list
Do not simply tell employees to "check the formulary." Give them the website, app, phone number, or instructions they need to find it.
Make the support path clear
Employees should know who to contact when something does not go as expected. Make that information easy to find before they are standing at the pharmacy counter.
Communicate throughout the year
Prescription questions do not stop after enrollment. Short reminders about pharmacy resources, coverage tools, or where to get help can keep useful information accessible when employees actually need it.
What employees should know before they visit the pharmacy
A short checklist can prevent several common surprises.
Before filling a new prescription, encourage employees to:
- Check whether the medication is covered by their plan.
- Confirm that the pharmacy participates in their network.
- Check their expected out-of-pocket cost when possible.
- Find out whether the medication requires prior authorization or another coverage step.
- Ask their prescriber about covered alternatives if cost or coverage is a concern.
- Know who to contact when they have a pharmacy benefit question.
Employees do not need every detail memorized. They need a reliable way to find the right information when they need it.
Clear communication helps employees use their benefits with confidence
Prescription benefits become easier to use when employees know what to check before filling a medication, understand the basic rules that may affect coverage, and know where to turn when something goes wrong.
For employers, that means communication should answer the questions employees actually ask. What is covered? What will I pay? Where can I fill it? Does it need approval? Who can help me?
Answering those questions clearly gives employees a practical starting point and gives HR something useful to point to when questions come in.
Want to make prescription benefits easier for employees to understand? Explore Intercept Rx's pharmacy resources and practical tools for employers.
Key Takeaways
- Employees may not realize that prescription coverage has its own formularies, networks, cost-sharing rules, and approval requirements.
- Many pharmacy questions begin when an employee's experience at the pharmacy does not match what they expected.
- Clear instructions on where to check coverage, cost, pharmacy participation, and approval requirements can prevent avoidable confusion.
- Pharmacy communication works best when employees receive useful information during enrollment and can easily find it again when they need a prescription.
- HR does not need to answer every pharmacy question directly. Employees should know which resources and contacts can help them resolve specific issues.
