UNIVERSITY PARK, Pa. — For 2026, full-time staff and faculty members enrolling in Penn State’s health plans will be able to choose from the same plan options as are currently available. While Highmark Blue Shield will remain the University’s third-party administrator for medical services, CVS Caremark will replace Express Scripts and Accredo as the University’s pharmacy provider.
Enrolled employees will see a slight increase in payroll contributions. Across each plan, employees may also see increases to deductible, coinsurance maximums or out-of-pocket maximums, depending on which plan they and their dependents are enrolled in.
For example, an employee earning $75,000 annually will see an increase between 63 cents and $5.63 in monthly payroll contributions, depending on their plan and number of people covered.
Additional information on plan updates for this year is below and also available on the Human Resources website.
Technical service employees should refer to their collective bargaining agreement.
“We know how important quality health benefits are for our employees, and we remain committed to providing our valued staff, faculty and their dependents with competitive, affordable, high-quality health care,” said Jennifer Wilkes, vice president for Human Resources and chief human resources officer. “It remains a fact that Penn State, along with all employers, continues to face rising health care costs, and this year’s adjustments reflect that reality — this year alone, we’re budgeting for an increase in health care costs of about $30 million. However, we remain committed to providing access to affordable and high-quality health care to our employees and their families.”
Contribution changes and plan designs for the 2026 health plan were discussed in consultation with key stakeholder groups across the University, including the Faculty Senate Benefits Committee, the Health Care Advisory Committee and the University Staff Advisory Council.
2026 benefits overview
New pharmacy partner
Penn State regularly works to secure the best benefits for employees and manage overall costs. As part of those efforts, the University is partnering with CVS Caremark for 2026. CVS Caremark has a national network of more than 60,000 in-network pharmacies, including many chain and independent pharmacies.
Changes will take effect on Jan. 1, 2026, and the University’s current medical provider, Highmark Blue Shield, will coordinate with CVS Caremark to promote a smooth transition for employees.
Employees’ existing prescriptions will be automatically transferred to CVS Caremark, and medications with prior authorizations will be honored with CVS Caremark into the 2026 plan year. Ahead of the transition, employees will receive new CVS Caremark ID cards in December. Employees will also be able to download the CVS Caremark app for electronic access of their ID card, their formulary, participating pharmacies and more.
Additional information about CVS, and the transition from Express Scripts and Accredo to CVS, is available on the 2026 Pharmacy information website.
Upward trend in health care costs continues nationally
Leaders in Penn State Human Resources project that health care costs will increase by $30 million for 2026, continuing an annual trend of significant cost growth at Penn State and for employers nationally. As the University continues to monitor and respond to these factors in the coming years, Wilkes said Penn State continues to work aggressively to keep costs as low as possible, but employees should be prepared for additional increases or adjustments to plan designs in future years.
Penn State is self-insured, meaning the University and its employees together cover the full cost of health insurance under a 75/25 cost-share model, with the University covering 75% of total employee health care costs and employees contributing 25%.
How might my costs change in 2026?
Employees can estimate their payroll contributions for 2026 for each plan type and coverage tier by downloading Penn State Human Resources’ health care payroll contribution calculator. A chart of the plan design, including deductible, coinsurance and out-of-pocket costs, also is available for review.
Payroll contributions to rise minimally, based on annual base salary
Employees’ payroll contributions will see a slight increase in 2026. Penn State employees’ payroll contributions are based on a salary-indexed model, which is designed to share health care costs among employees using an individual’s exact annual base salary to determine how much each employee contributes for coverage.
For example:
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Under the Lion Traditional plan, for 2026, a monthly paid employee earning $75,000 will see their contribution increase by $1.88 per pay period for individual coverage or $5.63 per pay period for family coverage.
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Under the Lion Advantage plans, a monthly paid employee earning $75,000 will see their contribution increase by 63 cents per pay period for individual coverage or $2.50 per pay period for family coverage.
Adjustment to out-of-pocket maximums
Out-of-pocket maximums also will rise by varying amounts depending on whether employees are enrolled in the Lion Traditional or Lion Advantage plans.
What is an out-of-pocket maximum (OOPM)? The out-of-pocket maximum includes deductible and coinsurance and is the most a plan holder will pay for certain health care expenses in a calendar year before their care is covered at 100%. Each year, enrolled employees pay the discounted cost of their health care when using in-network providers until their deductible is reached. Then the health plan covers 90% of all in-network care until their coinsurance out-of-pocket maximum is reached, at which point eligible expenses are covered by insurance at 100% for the remainder of the benefit year.
For 2026, OOPMs for individuals under the Lion Traditional plan will increase from $1,250 to $2,000, while the OOPM for families will move from $2,500 to $4,000. The OOPM does not include copay costs for office or emergency visits. The OOPM for prescriptions, which is not changing in 2026, is set separately.
For employees enrolled in the Lion Advantage plans (both the HSA and Flex options), OOPMs for individuals will increase by $50, from $3,625 to $3,675; and for families the OOPM will rise by $100, from $7,250 to $7,350. Lion Advantage HSA enrollees will also see a required increase in the IRS minimum deductible. The OOPM will include deductible, coinsurance maximum and prescription costs.
Analysis of industry trends revealed the OOPM for Penn State plans was below the industry average, and adjustments were necessary in the face of rising health care costs nationwide.
Open enrollment kicks off Nov. 3
Open enrollment starts Nov. 3 and runs through 5 p.m. EST on Nov. 14.
Employees are encouraged to review the online 2026 Benefits Open Enrollment details and attend a 2026 Benefits Open Enrollment webinar. Webinars begin on Tuesday, Oct. 14. Penn State offers a variety of additional programs and services to support employees’ health and well-being. A full listing of employee health and wellness resources can be found on the Penn State Human Resources website.