Final answer:
In the context of third-party insurance plans, a formulary refers to a list of medications that are covered by the insurance plan. Other relevant definitions include Premium and Copay.
Step-by-step explanation:
In the context of third-party insurance plans, a formulary refers to a list of medications that are covered by the insurance plan. It includes both generic and brand-name drugs. Insurance companies create formularies to provide a guideline for healthcare providers and policyholders regarding which medications are covered and at what cost. The formulary can vary from one insurance plan to another, and it may categorize medications into different tiers based on their cost and availability.
Other relevant definitions in the context of insurance include:
1. Premium: The amount of money paid by an individual or entity to an insurance company in exchange for coverage.
2. Copay: A fixed amount that an individual pays for a specific healthcare service or medication, typically at the time of receiving the service or medication. Copays can vary depending on the insurance plan and the type of service or medication.