To cushion the impact of escalating medical costs, employers are taking measures to control their company expenses for employee health care. According to Health Affairs, while the steady rise of pharmaceutical drug use greatly improves health standards, it also drastically increases health care costs. It’s therefore crucial to educate your employees on prescription drug spending, monitor employee spending habits and track your company’s health care expenditure. When educating your employees about saving on prescriptions, consider these five essential areas:

1. Tiered Cost Structure

Many plans incorporate a cost structure or a tiered system in which a formulary — the list of drugs covered under the health plan — is specified. Each tier gives the copay amount for generic, preferred and non-preferred brand-name drugs, as well as specialty drugs on the formulary. If your plan features this structure, draw your employees’ attention to your plan’s offered incentives for people who choose lower-cost alternatives. Opting for these formulary-approved generic drugs often means lower copayments, resulting in substantial savings.

2. Mail Order

Encouraging enrollees to order prescription drugs by mail is another way to minimize their health care expenses. Your employees earn massive savings when purchasing prescription drugs via this method. Furthermore, enrollees who have prescriptions for chronic conditions tend to receive large refills (such as a 90-day supply) compared to those who refill over the counter. This translates to major savings.

3. Network Pharmacies

Make employees aware of any in-network pharmacy purchases covered by your health plan. In such a plan, special discounts have been arranged with specific pharmacies. In addition, employees should know they’ll receive coverage for drug-subscription purchases from these in-network pharmacies.

4. Prescription Drugs

Encourage employees to take a more active approach in the prescription-acquiring process by asking their doctors if generic, over-the-counter or less expensive brand-name drugs are available. If the prescribed drug is not listed in the formulary, your employee has the right to discuss alternatives with their doctor. Consumer Reports affirms that prescription drug lists change frequently, so employees should look up the formulary regularly to confirm provider coverage and out-of-pocket costs prior to filling prescriptions.

5. Carved-In Pharmacy Benefits

Opting for a health plan that offers pharmacy and prescription benefits as part of the total health care package, also known as carved-in pharmacy benefits, results in significant savings on medical costs through better care coordination and utilization management. This allows your health provider direct access to pharmacy data, which makes it possible to control copays and drug-benefit tiers. This holistic approach to controlling medical costs through data transparency will translate to massive savings on overall company health care costs in the long run.

Directing your employees to vital resources and tools available through your provider’s site allows them to control the decision-making process and take advantage of cost-saving strategies for purchasing prescription drugs. Explore various channels to disseminate the relevant information and determine what works best for your employees. Keeping the lines of communication open is key to ensuring that all of your employees know their options for keeping costs low — for themselves and for your company.

Emmie Sahlan has a graduate degree in English and has been writing professionally for the past five years. Her niche areas are insurance, credit cards, personal finance and education.