Overview: A Major Shift in NC Health Coverage
North Carolina’s State Health Plan is making a bold move. Rather than renewing existing agreements with Aetna and CVS Caremark, plan officials have decided to open both contracts to fresh competitive bids. The new contracts will take effect on January 1, 2028, and will cover more than 742,000 state employees, teachers, retirees, and their dependents across North Carolina.
This decision marks a significant turning point for the plan, which spends over $4 billion annually on healthcare. The announcement came through an email to plan members, confirming that officials will decline Aetna’s optional two-year extension and allow CVS Caremark’s pharmacy benefit contract to expire without renewal.
Why the State Health Plan Is Moving On
A New Administration With Different Priorities
The Office of the State Treasurer, which oversees the plan, cited a clear reason for the change. Officials stated that “this administration has different priorities and would prefer a contract that is more in line with those priorities.” Consequently, the plan is not simply continuing the path set by its predecessor.
State Treasurer Brad Briner has taken several steps since taking office to address the plan’s financial pressures. These include raising health premiums, making plan design changes, cutting prior authorizations for certain procedures, and launching a preferred provider system aimed at greater cost transparency. Members who choose these preferred providers pay lower co-pays as a result.
A Looming Financial Crisis
The plan faces a projected $507 million deficit in 2026. Moreover, that shortfall could grow to $1.4 billion by 2027 without corrective action. These financial pressures make the choice of a strong, aligned vendor more urgent than ever. Therefore, the administration sees the competitive bidding process as an opportunity to find partners who can help reverse the trend.
What Happens to Aetna’s Contract?
From New Entrant to Exit Candidate
Aetna took over as the plan’s third-party administrator (TPA) on January 1, 2025, replacing Blue Cross Blue Shield of North Carolina, which had held the contract for more than 40 years. The transition was historic — it was the first TPA change the plan had seen in decades. Aetna’s original three-year agreement runs through the end of 2027, with options for two one-year renewals.
However, the plan will not exercise those options. Instead, officials will issue a new request for proposals (RFP) in late March 2026 for a contract starting in January 2028. Plan executive administrator Thomas Friedman has already briefed potential vendors, noting that the plan wants “an excellent claims processor” as its next partner.
Aetna’s Response
Aetna stated it had successfully managed the “first third-party administrator transition in decades” and remains committed to serving plan members. The company noted that RFPs are “a routine part of the state’s procurement process” and declined to comment on future bids ahead of the formal RFP release. The plan’s spokesperson added that no media commentary would be offered until after the evaluation is complete.
CVS Caremark’s Troubled Relationship With the Plan
A History of Disputes
CVS Caremark has served as the plan’s pharmacy benefit manager (PBM) since 2017. Nevertheless, its relationship with the plan deteriorated significantly in 2025. The State Health Plan accused CVS Caremark of failing to pass along drug rebates as required under their contract, alleging the PBM owed tens of millions of dollars. Officials even considered legal action.
Although the two sides eventually reached an agreement in October 2025, the damage to the working relationship was clear. Accordingly, plan officials have chosen not to renew the CVS Caremark PBM contract, which also expires at the end of 2027.
A New PBM Search
The State Health Plan has already posted information on its website for a new pharmacy benefits manager RFP. A vendor “silent period” is currently in effect while the process moves forward. Officials noted that the choice of PBM will also influence the plan’s formulary decisions, including coverage of GLP-1 weight-loss medications.
What the RFP Process Means for Members
No Immediate Disruption
Members should not experience immediate disruptions to their coverage. Both the Aetna and CVS Caremark contracts remain in force through December 31, 2027. Claims will continue to be processed, and access to care is expected to be maintained throughout the transition period.
A Critical Timeline
The timeline is tight by design. Plan officials need adequate implementation time before open enrollment in fall 2027. Running both the TPA and PBM RFP processes simultaneously also creates complexity. Still, officials argue the dual search gives the plan leverage — and an opportunity to find fully aligned partners for both contracts at once.
What New Vendors Must Offer
The plan has outlined its expectations for future partners. Specifically, the State Health Plan is seeking vendors who support the “alignment of incentives between members, providers, and the plan.” Future partners must help improve member health outcomes, deliver an excellent experience for both members and providers, and support the plan’s long-term financial sustainability.
Plan officials have also emphasized transparency. The preferred provider system already in place rewards providers who offer cost transparency with lower member co-pays. Future TPA and PBM partners will likely need to support and expand this model.
What Members Should Expect Next
The formal RFP for a new TPA will launch in late March 2026. The pharmacy benefit manager RFP is already posted. Vendors will submit bids, and officials plan to share updates after the evaluation is complete. Members can expect to hear more about any changes well ahead of open enrollment in fall 2027.
For now, coverage continues unchanged. State employees, teachers, and retirees should monitor communications from the State Health Plan for updates as the bidding process unfolds.
