Carrier Drug Lists by Group Size: 2–50 to 1,000+

Employers comparing carriers usually compare networks and premiums, then treat the drug list as a detail to sort out later. That gets the order backwards for a significant number of groups, because the formulary is the part of your plan that changes most as you cross group-size thresholds — and at the smallest sizes it is not yours to choose at all.

What follows is what the Michigan carriers actually publish about which drug list applies at which size. The specific lists change annually; the structure has been stable.

2 to 50 Employees: You Take the List You Are Given

In the ACA small group market the formulary comes with the product. The employer has no meaningful choice, and in most cases the list is the same one sold to individuals on the exchange.

Blue Cross Blue Shield of Michigan directs small group members to the Custom Select Drug List, stating that if your employer has 50 or fewer employees you have a small group plan and there are two drug lists, depending on whether the plan is HMO or PPO. The PPO version runs five tiers and the HMO version six. That is the same list individual and marketplace members receive — the split is by plan type, not by employer preference.
Priority Health is more explicit still: its employer formulary page states that Optimized Rx is the formulary for all small groups, and is available as a rider for large groups. A small group employer does not elect it and cannot decline it.
Health Alliance Plan by Henry Ford Health maintains a separate Qualified Health Plan formulary for businesses with 50 or fewer employees, distinct from its commercial group plan formulary.

The practical consequences at this size are worth being blunt about. You cannot add a drug the list excludes. You cannot soften a step-therapy requirement for an employee it is failing. You have no visibility into rebates, because the rebate belongs to the carrier and is already priced into your premium. And you will not receive claims-level pharmacy data, because the claims are not yours.

This is also why pharmacy is rarely where a 2 to 50 employee group finds savings. At this size the pharmacy lever is choosing between carriers whose lists differ, not managing a list you control.

51 to 249 Employees: The Formulary Becomes a Decision

Crossing 50 employees changes pharmacy more than it changes medical. You move out of the small group market and, for the first time, the drug list becomes something you select rather than receive.

Blue Cross Blue Shield of Michigan publishes several large group drug lists and the employer chooses which applies: Premium, Preferred, Clinical, Custom PPO, Custom HMO, and Custom Select. Priority Health flips its default — Traditional becomes the standard list, with Optimized Rx available as a rider the employer elects.

These lists are not cosmetic variants. They differ in which drugs are excluded outright, how aggressively generics are enforced, and how the rebate economics work. Blue Cross describes its Preferred Drug List as a rebate-driven formulary for large groups and states in its own employer material that groups on it achieve annual rebate improvements 10% to 13% greater than similar benefit designs, with average annual prescription drug spend savings of around 3%. Those are the carrier’s published figures rather than an independent measurement, and the stated tradeoff is explicit: medications that do not provide greater clinical value than comparable or lower net cost alternatives are excluded.

That tradeoff is the whole decision at this size. A more restrictive list costs less and generates more rebate. It also means some employees will be moved off drugs they are currently taking, and your HR team will field those conversations. The question is not which list is best but how much disruption your workforce will absorb, and whether you have the appetite to handle exception requests when a physician pushes back.

Ask for the exclusion list, not the formulary. The formulary tells you what is covered; the exclusion list tells you what will generate complaints. Compare exclusions against your current utilization if you can get it.
Ask how mid-year changes work. Most large group lists are updated monthly. Find out whether a drug can be removed mid-year and what notice employees receive.
Ask about the exception process — who decides, how long it takes, and what happens to the employee in the meantime.

Level funding is also available in this band, which gives you claims data you did not have before. That data is what makes the next step possible, and it is worth collecting even in a year when you change nothing.

250 to 999 Employees: The Formulary Can Stop Being the Carrier’s

At this size self-funding becomes genuinely practical, and with it a question that does not exist below: whether pharmacy stays bundled with the medical carrier at all.

Two structures are available.

Bundled. Pharmacy runs through the carrier’s own PBM under an administrative-services-only arrangement. You keep one vendor, one ID card and one set of reporting. You are still choosing from the carrier’s menu of formularies, and the rebate terms are the carrier’s.
Carved out. Pharmacy moves to a separate PBM contract with its own formulary, its own pricing and its own rebate terms. This is the point at which pass-through pricing, contractual rebate pass-through and audit rights become things you can actually negotiate rather than things you read about.

A carve-out is not automatically the right answer. It adds a vendor to manage, requires accumulator integration so that deductible and out-of-pocket amounts track correctly across medical and pharmacy, and the coordination failures land on your HR team. What it buys is the ability to see and control the largest fast-growing line in your plan.

The formulary itself also becomes negotiable rather than selectable. Employers in this band commonly adopt a standard PBM formulary but negotiate specific carve-ins — keeping a drug their population depends on that the standard list excludes — and negotiate the prior authorization criteria applied to specialty and weight-management drugs rather than accepting the vendor default.

This is also where the contract definitions start to matter more than the headline discount. How specialty is defined, who decides when a drug moves onto the specialty list, what counts as a rebate and what is recharacterized as an administrative or data fee — these determine your actual cost far more than the guaranteed discount percentage does. Our PBM audit guide covers what to ask for.

1,000+ Employees: You Can Build the List

Above roughly a thousand employees the formulary becomes a document you author rather than one you pick. Employers at this size commonly contract directly with a PBM, and the negotiable terms extend to nearly everything.

A custom formulary, built from a standard list but with your own inclusions, exclusions and tier placements reflecting your population’s actual utilization.
Your own utilization management criteria — the prior authorization and step therapy rules applied to your members, rather than the vendor’s defaults. This matters most for specialty and weight-management drugs, where the default criteria are written for the vendor’s book of business and not for your workforce.
Full pass-through pricing with disclosed administrative fees, so the PBM’s compensation is a line item rather than a spread.
Contractual rebate guarantees with a defined minimum per script, an audit right, and a definition of rebate tight enough that manufacturer payments cannot be recharacterized outside it.
Specialty pharmacy strategy, including whether specialty is dispensed through the PBM’s affiliated pharmacy and whether site-of-care steering applies to infused drugs billed under the medical benefit.

The constraint at this size is not what is available but what you can administer. A custom formulary requires clinical governance — someone accountable for deciding what changes and when, and a process for handling exceptions that does not collapse into whoever complains loudest. Employers who negotiate sophisticated pharmacy terms and then do not staff the oversight tend to end up back on the vendor’s standard list within two renewals.

The National Carriers: UnitedHealthcare, Aetna and Cigna

The three national carriers follow different rules from the Michigan plans, and from each other. Two things matter more than the list names. First, whether the carrier will write your group at all at your size in Michigan. Second, who owns the pharmacy benefit manager behind the list: UnitedHealthcare’s parent owns Optum Rx, Aetna is part of CVS Health, which owns CVS Caremark, and Cigna owns Express Scripts. Those are the three PBMs the FTC examined in the January 2025 staff report. With any of these carriers, the drug list and the PBM economics come as a package unless you are large enough to separate them.

UnitedHealthcare

UnitedHealthcare offers Michigan small businesses both fully insured and level funded plans, generally for 2 to 50 full-time equivalent employees. Its fully insured drug lists are organized by small group (2–50) and large group (51+), and by state. Michigan is not one of the states with a state-specific list, so Michigan groups fall under UnitedHealthcare’s national commercial list. Its 2026 documents include variants such as Advantage 3-Tier and Traditional 3-Tier, and some plans run a fourth tier.

The caution with UnitedHealthcare is transparency at quote time. It does not publish a public map of which named list goes with which employer size or funding type. It tells members to check their ID card or account to find their list. Before you sign, ask the account team in writing which list the quoted plan uses, and get that list. Do not assume the one on the website applies.

Aetna

Aetna divides its drug lists by funding type rather than headcount. Its employer pharmacy page offers fully insured plans two lists:

Advanced Control Plan: covers select generics and only a few preferred brands per class. Aetna positions it for employers seeking lower premiums through exclusions.
Standard Opt Out Plan: covers most generics and some brands, including specialty drugs. This is the more permissive of the two.

Self-insured plans choose from a different menu: the Aetna Standard Plan, the Advanced Control Plan and the High Value Plan, which covers generics first. Aetna’s small-business route is Aetna Funding Advantage, a level-funded, self-funded arrangement with stop-loss. So which Aetna drug list you get depends on how the plan is funded as much as on your size. When quoting, ask which list applies to the specific funding arrangement proposed.

Cigna Healthcare

Cigna is the one most likely to surprise a small Michigan employer. According to its small group page, fully insured small group plans are currently offered only in Arizona. Cigna stopped offering them in Georgia and Tennessee as of November 1, 2025. Michigan is not listed. Cigna’s route for smaller employers is Cigna Level Funding, which Cigna lists for groups of 25 to 999 eligible employees. In practice, a Michigan employer with fewer than 25 employees has no Cigna option.

Above that line, Cigna has the widest drug-list menu of any carrier discussed here. It offers twelve employer drug lists: Standard, Performance, Legacy, Legacy Performance, Advantage, Value, and six National Preferred variants running from three to six tiers, some with a separate specialty tier. That range is a real advantage for a group that wants to tune the list, and a real burden for one that does not know how to choose.

One Cigna detail belongs in any level-funding comparison. Cigna says that if claims come in below expectations, renewing clients are eligible to get 50% or more of the savings back as an administrative fee credit. That is a credit against next year’s fees, available only if you renew, not a cash refund. It is exactly the kind of surplus provision to read before signing. Our captive vs level-funded comparison covers what to ask.

The Four Bands Side by Side

	2–50	51–249	250–999	1,000+
Who picks the formulary	The carrier — it comes with the product	The employer, from the carrier’s menu	The employer, or a separate PBM if carved out	The employer, built to specification
Typical Michigan example	BCBSM Custom Select; Priority Health Optimized Rx; HAP QHP formulary	BCBSM Premium, Preferred, Clinical, Custom or Custom Select; Priority Health Traditional with Optimized Rx as a rider	Carrier ASO formulary, or an independent PBM’s standard list	Custom list built from a standard base
National carriers in Michigan	UnitedHealthcare fully insured or level funded; Aetna through Aetna Funding Advantage (level funded); Cigna not available under 25 employees	UnitedHealthcare large group list; Aetna fully insured (Advanced Control or Standard Opt Out) or self-insured menu; Cigna Level Funding from 25, with twelve lists	Aetna self-insured menu (Standard, Advanced Control, High Value); Cigna Level Funding to 999 or ASO; UnitedHealthcare ASO	ASO with the carrier’s own PBM (Optum Rx, CVS Caremark, Express Scripts) or a carve-out
Can you add an excluded drug?	No	Rarely, and only by changing list	Sometimes, by negotiated carve-in	Yes
Who sets prior authorization rules	The carrier	The carrier	The carrier or PBM, partly negotiable	You, within clinical reason
Rebates	Retained by the carrier, priced into premium	Retained by the carrier; formulary choice affects the rebate the carrier earns	Negotiable, including pass-through	Contractually guaranteed and auditable
Claims data	Not available	Limited; fuller under level funding	Full claims-level data	Full, plus the ability to reprice it
Where the savings actually are	Choosing between carriers	Choosing the right list and managing disruption	Contract structure and carve-out decision	Contract definitions and utilization management

Read across the top row and the pattern is clear: the formulary moves from something done to you, to something chosen by you, to something built by you. Most of that transition happens at two thresholds — 51 employees and the point where self-funding becomes viable.

What to Do With This at Your Next Renewal

Pull your top 20 prescriptions by spend and by script count. If you are fully insured and small, ask your broker what the carrier will release — it may be little, which is itself informative.
Look each one up on the actual drug list document for every carrier you are quoting, not the marketing summary. Note the tier, and any prior authorization or step therapy requirement.
If you are above 50, ask for every drug list the carrier offers and the exclusion list for each, then compare the exclusions against your utilization before looking at the premium difference.
Ask what happens mid-year when a drug moves or is removed, and what the exception process looks like in practice.
If you are self-funded or approaching it, price the carve-out alongside the bundled option rather than assuming the bundled arrangement is simpler and therefore cheaper.

We run this comparison as part of a renewal review rather than treating pharmacy as a line item that follows the medical decision. If you want your current drug list checked against your own utilization, that is a concrete exercise we can do with your claims or prescription data.

Frequently Asked Questions

Why does my drug list change when we pass 50 employees?

Because you leave the ACA small group market. Below 51 employees the formulary is part of a standardized product — Blue Cross Blue Shield of Michigan directs small groups to its Custom Select Drug List, and Priority Health states that Optimized Rx is the formulary for all small groups. Above 50 you are in the large group market, where the carrier offers several drug lists and the employer selects one. It is the single largest change to pharmacy benefits across the whole size spectrum, and it usually receives less attention at renewal than the medical network does.

Can a small employer customize its formulary?

Effectively no. In the small group market the drug list comes with the plan, and the only choice is typically whether you are on the HMO or PPO version of the same list. If a specific medication matters to your workforce, the lever available to you is choosing between carriers whose lists treat that drug differently, which means checking the actual drug list document before you select a carrier rather than after.

What is the difference between Priority Health Traditional and Optimized Rx?

They are two different employer drug lists. Priority Health states that Optimized Rx is the formulary for all small groups and is available as a rider for large groups — so a small group receives it automatically, while a large group can elect it on top of the Traditional list. Because the lists differ in what they cover and exclude, a large group considering the rider should compare the exclusions against its own utilization rather than deciding on the premium difference alone.

What does a rebate-driven formulary mean?

It means the drug list is constructed to maximize manufacturer rebates, typically by excluding drugs that do not offer greater clinical value than a comparable or lower net cost alternative. Blue Cross Blue Shield of Michigan markets its Preferred Drug List to large groups on this basis, stating in its employer material that groups on it see annual rebate improvements 10% to 13% greater than similar benefit designs and average annual drug spend savings of about 3%. Those are the carrier’s own published figures. The tradeoff is real and stated: a tighter list means some employees are moved off drugs they currently take.

At what size can we carve out pharmacy to a separate PBM?

Realistically once you are self-funded, which for most employers means somewhere above 250 employees, though it is possible lower. A carve-out gives you a separate PBM contract with its own formulary, pricing and rebate terms, and it is the point at which pass-through pricing and audit rights become negotiable. The cost is a second vendor to manage and accumulator integration so deductible and out-of-pocket amounts track correctly across medical and pharmacy. Below roughly 100 employees the administrative overhead generally outweighs the leverage.

Should we choose a carrier based on its drug list?

If your workforce has concentrated utilization of a particular drug or drug class, yes — and this is underweighted in most carrier decisions. Two carriers with comparable networks and premiums can treat the same medication very differently, and at small group size the drug list is the part you cannot change afterward. The practical check is to take your top prescriptions, look each one up on each carrier’s published drug list, and note the tier and any prior authorization or step therapy requirement before deciding.

How often do drug lists change?

Large group drug lists in Michigan are typically updated monthly, and drugs can move tier or be removed during the plan year. This is worth asking about specifically: find out what notice employees receive when a drug is removed mid-year, what the exception process is, who decides, and how long it takes. An employee discovering at the pharmacy counter that a maintenance medication is no longer covered is the failure mode to design against.

Do UnitedHealthcare, Aetna and Cigna sell small group health plans in Michigan?

It varies by carrier. UnitedHealthcare offers Michigan small businesses both fully insured and level funded plans, generally for 2 to 50 full-time equivalent employees. Aetna reaches small employers through Aetna Funding Advantage, a level-funded, self-funded arrangement with stop-loss. Cigna currently offers fully insured small group plans only in Arizona, not Michigan. Its level funding product is listed for groups of 25 to 999 eligible employees, so a Michigan employer with fewer than 25 employees has no Cigna option.

Which pharmacy benefit manager does each national carrier use?

UnitedHealthcare’s parent, UnitedHealth Group, owns Optum Rx. Aetna is part of CVS Health, which owns CVS Caremark. Cigna owns Express Scripts. These are the three largest PBMs, the ones the FTC examined in its January 2025 staff report on prescription drug middlemen. With a fully insured or level-funded plan from one of these carriers, the drug list and the PBM terms come as a package. Separating them generally requires a self-funded arrangement large enough to support a pharmacy carve-out.

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How Carrier Drug Lists Differ by Group Size: 2–50, 51–249, 250–999 and 1,000+