The State Health Plan (Plan) Board of Trustees took several landmark actions today aimed at making tangible improvements for the state’s hardworking teachers, state employees and retirees. These steps are aimed at affordability, strengthening access to care and ensuring the long-term sustainability of the Plan for its nearly 750,000 members.
The Board voted on the following:
- Approved the contract award for Third-Party Administrative (TPA) Services to Blue Cross NC, effective Jan. 1, 2028.
- Approved the contract award for Pharmacy Benefit Manager (PBM) for Blue Cross NC, effective Jan. 1, 2028.
- Approved Preferred Provider contracts with UNC Health and Novant Health effective Jan. 1, 2027.
- Approved 2027 premium rates for all members.
- Approved 2027 benefit changes, including some decreased copays associated with parts of the new tiered provider network.
"This is a monumental step in the right direction for the Plan and the people we serve," said Treasurer Brad Briner. "Our members deserve for us to fight for them. Affordability, improved access to high-quality care and more sustainability for Plan mean better health care and better health. These actions do just that. For decades, health care costs have risen faster than funding, creating increasing pressure on our public servants, taxpayers and the Plan itself.”
Third-Party Administrative Services and Pharmacy Benefit Manager Contract Award
Following a competitive Request for Proposals (RFP) process, the Board approved the Plan's Third-Party Administrative Services contract for Blue Cross NC. The contract includes claims administration and provider network services and will serve as the operational foundation for delivering an improved member and provider experience. Blue Cross NC’s bid gives the Plan the opportunity to save up to a $1 billion dollars over the life of the contract through deeper discounts and value-based payment opportunities on top of our Preferred Provider Strategy.
The Board also approved the Pharmacy Benefit Manager contract award to a consortium under Blue Cross NC following a competitive RFP process designed to identify a transparent, innovative partner capable of delivering value while navigating the growing complexity of prescription drug costs.
Both contract terms run from Jan. 1, 2028, through Dec. 31, 2031, with two optional one-year renewal periods. Blue Cross NC was one of two companies that submitted proposals for TPA services. Aetna also submitted a bid.
Multiple vendors submitted proposals across the three RFP PBM modules. Following the evaluation, Blue Cross NC was the only vendor to meet all minimum requirements established by the Plan.
Preferred Provider Contracts
The Board approved Preferred Provider agreements with UNC Health and Novant Health, effective Jan. 1, 2027.
Under the agreements, both health systems will provide discounted rates and collaborate with the Plan to improve the health of our members and lower the total cost of care. In return, they will receive Preferred Provider status within the Plan's new tiered network structure, which means members will benefit from lower costs when seeing these providers.
Together, UNC Health and Novant Health provide broad statewide reach through extensive networks of hospitals, physician practices, specialty providers and outpatient facilities, ensuring members across North Carolina have access to high-quality, lower-cost care options.
Preferred Provider Contracts
The Board approved Preferred Provider agreements with UNC Health and Novant Health, effective Jan. 1, 2027.
Under the agreements, both health systems will provide discounted rates and collaborate with the Plan to improve the health of our members and lower the total cost of care. In return, they will receive Preferred Provider status within the Plan's new tiered network structure, which means members will benefit from lower costs when seeing these providers.
Together, UNC Health and Novant Health provide broad statewide reach through extensive networks of hospitals, physician practices, specialty providers and outpatient facilities, ensuring members across North Carolina have access to high-quality, lower-cost care options.
2027 Benefit Changes
The Board approved benefit changes for 2027, including some decreased costs that mirror what copays looked like 15 years ago, that support the Plan's new tiered Preferred Provider network structure.
Beginning Jan. 1, 2027, providers will be categorized as Preferred, Access, Non-Preferred or Out-of-Network Providers. Members who use Preferred Providers will have lower deductibles, out-of-pocket maximums and copays than what they are currently paying. Access Providers will help ensure members continue to have access to affordable care in rural and underserved communities. Access Providers are cost neutral for members (same benefit as today) or in some cases may have lower out-of-pocket costs. Members who choose to see a Non-Preferred Provider will see a significant out-of-pocket cost increase. The Plan utilizes a broad network, but if members see an out-of-network provider it will work the same as it does today.
Members will continue to have access to the Lantern Surgical Benefit, which provides coverage for specific surgical procedures at no cost when using participating providers. Providers and procedures are continually increasing for this benefit.
"As we’ve witnessed, the status quo is not sustainable, we have try something different," said Executive Administrator Tom Friedman. "We decided to break the health care mold this year- and create competition for providers and incentives for members. The tiered network strategy we’re implementing places us on a more stable financial footing. The only alternative to thinking outside the box, would entail across the board increases to everything and we really didn’t think our members could- or should- be burdened with such an increase.”
Members will receive communication and education before Open Enrollment, which is scheduled for Oct. 12-30, 2026. Updated provider directories, online tools and dedicated support resources will help members understand their options and make informed health care decisions.
To view board materials click here.
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The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to nearly 750,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.
Resources for Media:
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Preferred Provider Coverage Maps: