Our latest review shows how differently employers structure those payments: 71% of covered workers in non-health savings account (HSA)-qualified plans have four or more prescription drug benefit tiers, compared with 41% in HSA-qualified plans.
But the simpler-looking benefit can expose patients to more percentage-based cost sharing. Among workers in plans with at least three tiers, 52% of those in HSA-qualified plans face coinsurance for preferred drugs, compared with 15% in non-HSA plans.
The consequential difference is the impact on the patient. Coinsurance can expose patients to a drug’s price before manufacturer rebates, even when those rebates substantially reduce the employer’s net cost. Fewer benefit tiers provide little assurance that those savings are shared with the patient at the pharmacy.
Below, we examine the latest data on employer-sponsored pharmacy benefits and show how tier structures, cost sharing formulas, rebates, and manufacturer assistance divide costs between plans and patients.
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THE DATA BEHIND THE BENEFITSOur exhibits draw on KFF’s 2026 Employer Health Benefits Survey, which surveyed 1,937 private and non-federal public employers with at least 10 workers. For those that really love methodology sections, you can find the full details here.
One methodological change that’s important for some of our analyses: KFF previously grouped HSA-qualified plans and certain high-deductible plans paired with health reimbursement arrangements (HRAs) into the high-deductible health plan with savings option (HDHP/SO) category. The different types and uses of HRAs recently have made it more difficult to make generalizations about these plans, so beginning in 2026, HRA plans are classified by their underlying plan characteristics (e.g., PPO, POS, HMO).
We therefore compare HSA-qualified plans with non-HSA plans. The latter group can include plans with substantial deductibles, so these results are not directly comparable to past analyses.
COUNTING THE TIERS
Pharmacy benefit tiers assign different patient payment requirements to different groups of drugs. Lower payments for generics encourage substitution when an equivalent product is available. Preferred versus nonpreferred placement also gives PBMs a tool for negotiating manufacturer price concessions.
Here’s how those layers are distributed across covered workers:
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Two patterns stand out:
- Non-HSA-qualified plans have more tiers. Four or more tiers account for 71% of covered workers, while another 21% have three tiers.
- HSA-qualified plans have more varied structures. Four or more tiers account for 41% of covered workers, while 26% have three tiers. Another 15% have the same cost-sharing formula regardless of drug type, and 11% have no additional cost sharing after meeting the deductible.
However, tier counts alone do not tell us how a prescription’s cost is divided between the plan and the patient.
WHEN PATIENTS SHARE THE PRICE RISK
A copayment is generally a fixed dollar amount for a prescription, no matter a drug’s price. Coinsurance makes the patient responsible for a percentage of the prescription’s negotiated price between the pharmacy and payer, before post-sale reductions like rebates.
Among workers with three or more prescription drug benefit tiers, non-HSA-qualified plans largely favor copayments for the first three tiers. The shares facing copayments are 85% for first-tier drugs, 83% for second-tier drugs, and 77% for third-tier drugs.
Fourth-tier coverage is more mixed: 55% face copayments and 40% face coinsurance.
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HSA-qualified plans show a very different pattern. Copayments remain more common for first-tier drugs, covering 61% of workers. For the higher tiers, coinsurance becomes much more prominent:
- Preferred drugs: 52% face coinsurance, compared with 15% in non-HSA-qualified plans.
- Nonpreferred drugs: 51% face coinsurance, compared with 21%.
- Fourth-tier drugs: 65% face coinsurance, compared with 40%.
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HSA-qualified plans may sometimes have fewer tiers overall, but workers in their tiered benefits are much more likely to face percentage-based cost sharing, which is often more out-of-pocket for the patient compared to a copayment.
These figures describe benefit designs. They do not establish which plan type produces the highest annual spending for every patient. Deductibles, premiums, employer contributions, out-of-pocket limits, and the drugs a patient needs all affect the full comparison.
WHAT PATIENTS ARE ASKED TO PAY
The chart below shows average copayment amounts and coinsurance rates. The tier figures apply to workers with three or more tiers. The separate specialty figures apply to workers at large firms with a dedicated specialty tier.
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For separate specialty tiers, the average copayment is $110 and average coinsurance is 27%. KFF reports that 54% of workers at large firms with a separate specialty tier face coinsurance on that tier, while 41% face copayments.
These averages describe different groups of workers and benefit designs. The specialty and fourth-tier results also cover different drug groupings. A lower specialty copayment and coinsurance average therefore does not establish that specialty coverage is more generous.
WHO GETS THE BENEFIT OF THE SAVINGS?
The price used to calculate coinsurance is a crucial part of the out-of-pocket calculation.
As we mentioned above, coinsurance is generally based on the negotiated price between the pharmacy and payer. For brand-name drugs, that price typically excludes manufacturer rebates paid later. A traditional rebate that reduces an employer’s net spending consequently may leave the patient’s payment at the pharmacy unchanged. Since the net spending is reduced with the rebate after the sale, it can also lead to the patient’s share of the net drug cost being much higher than the stated coinsurance percentage. That’s without even considering a deductible.
Tiered benefits can encourage lower-cost treatment choices when patients have clinically appropriate alternatives. Their financial incentives work differently when a patient needs a more expensive therapy with limited alternatives. A higher out-of-pocket payment can then create an affordability problem with little opportunity to change treatment.
In response to these benefit designs, pharmaceutical manufacturers often offer financial assistance that covers part or all of a patient’s out-of-pocket costs for a brand-name drug.
Perhaps surprisingly, plans view these financial assistance programs as a “good way to help plan sponsors save money” through the widespread use of copay accumulators and copay maximizers. In Section 6.2.2 of The 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, we estimate that copay accumulators absorbed $3.0 billion of manufacturers’ copay support funds, while maximizers absorbed $4.0 billion, which equates to about one-third of total manufacturer support funds. These funds benefits plans and their vendors.
ASK WHAT CREATED THE SAVINGS
For employers evaluating pharmacy benefits, these exhibits suggest looking beyond tier counts and rebate totals. Ask your PBM to show how benefit changes affect both net plan spending and patients’ actual out-of-pocket payments. For each claimed saving, identify how much reduces the employer’s liability and how much reduces the patient’s payment.
That assessment should examine the price used to calculate payments for coinsurance and deductibles, whether rebates reduce that price, how manufacturer assistance is treated, and where dollar caps limit patient payments.
When your PBM reports savings from their impressive negotiating skills, make sure they can prove it’s not just shifting more of the cost onto the patients.