On October 1, 2026, CVS Caremark added Zepbound (tirzepatide) back to its standard commercial formularies as a preferred weight-management option, reversing the exclusion it imposed in May 2025, per the company’s May 28 announcement. In the same stretch of weeks, PepsiCo’s pharmacy benefit manager, Express Scripts, told employees that weight-loss drug coverage would end in October because the category is, in the company’s words, one of the fastest-growing costs in the PepsiCo plans. Two of the largest exposure pools in self-funded health benefits walked into the 2027 plan year in opposite directions, and both moves are live now, at the exact point when sponsors lock formulary elections and stop-loss renewals.
The practical consequence is that GLP-1 is no longer a single trend line an actuary can model with one assumption. Bloomberg reported that more than 10 million patients regain insurance access to Zepbound through the Caremark reversal alone. Meanwhile the employer carve-out camp is growing: a Mercer survey cited in the PepsiCo reporting shows 6% of large employers already dropped weight-loss coverage in 2026 and another 5% plan to in 2027, while a Business Group on Health survey found coverage among large employers falling to 60% this year from 72% last year. Which default your plan inherited this fall determines whether your 2027 pharmacy projection should model a utilization step up or a step down, and that choice flows straight into your expected claim ratio and your stop-loss attachment.
Two defaults, one split trend
For plans sitting on the Caremark template, the October 1 change widens the funnel. Zepbound returns as a co-preferred option alongside Wegovy, and effective June 1, 2026, Caremark also removed its new-to-market block on Foundayo (orforglipron), an oral GLP-1. An oral therapy removes the injection barrier that suppresses uptake, and the 2025 exclusion period is over. Sponsors who elect the template should model 2027 GLP-1 utilization as a continuing upward frequency trend, not a plateau, even if unit costs are lower than 2024 peaks. Caremark says it secured a more affordable net cost from the manufacturer, and the press release claims a history of double-digit savings in the category for template customers, but the release offers no per-claim or per-member figures, so treat the affordability claim as directional until your own paid data confirms it.
For plans following the PepsiCo path, the modeling problem inverts. A weight-loss-only carve-out produces a hard stop in covered GLP-1 trend, but not a clean one. The Obesity Action Coalition notes manufacturer self-pay programs run $300 to $500 per month, which many members will still pursue outside the plan; those claims vanish from your data but not from your population. Members with a diabetes indication stay covered, so the carve-out shifts mix rather than eliminating the class. Expect a run-off tail as claims already in the pipeline, appeals, and mid-therapy continuations work through the system over one to two quarters.
The Segal 2027 Health Plan Cost Trend Survey, published July 23, 2026, quantifies why this split matters more than usual. Prescription drug trend is projected above 11% for 2027, and Segal’s actuals show much higher Rx trend for plans that cover anti-obesity medications than for plans that do not. New-to-market drugs released in the last five years accounted for a majority of 2025 prescription drug trend. In other words, the AOM coverage decision is now one of the largest single levers on whether your plan’s Rx trend lands near the survey average or well above it.
Who it affects
Self-insured employers on Caremark template formularies, especially mid-size sponsors that adopt PBM defaults rather than negotiating custom formularies. Large self-insured employers weighing a PepsiCo-style carve-out during fall open enrollment. Public entities and JPAs with self-funded health trusts, where a formulary default may have been inherited years ago and never re-examined. And any sponsor renewing specific or aggregate stop-loss this quarter, because underwriters are pricing both branches right now.
Where this shows up in your reserves
The diagnostic is the pharmacy trend assumption inside your plan’s expected claim ratio, and the paid-plus-IBNR run rate for October through December pharmacy claims. If your plan is on the reinstated template, pull the monthly GLP-1 paid claims series and watch for a Zepbound re-entry bump in the November and December valuations; the May 2025 exclusion showed how fast formulary changes move utilization, and reversals move faster because pent-up demand is already diagnosed. If your plan carved out coverage, watch the diabetes-indication pharmacy line for mix shift, and ask your actuary whether the IBNR estimate still carries a GLP-1 frequency assumption from before the carve-out. On the stop-loss side, the number to inspect is the projected claims figure on your renewal worksheet: attachment points and any laser terms set under 2025-2026 GLP-1 assumptions may already be stale in either direction. This is the same unhedged-retained-risk mechanics we described for lasered claimants, now applied at the category level.
What this means for your next review
Put one question on the agenda of your next reserve study or interim monitoring meeting: which branch is our 2027 pharmacy trend assumption actually modeling? If your actuary’s projection still reflects the 2025-2026 exclusion period and your plan is on the reinstated template, the expected claim ratio is understated for frequency. If your plan carved out coverage and the projection still assumes continuing GLP-1 growth, you may be over-reserving pharmacy while under-reserving the medical lines where displaced members surface. Ask for the assumption in writing, dated, and tied to your plan’s actual formulary election as of October 1.
Decision-maker checklist
- Confirm in writing which formulary template your plan defaulted into as of October 1, 2026, and whether Zepbound and Foundayo are covered options for your members. Adoption is an employer choice, not automatic.
- Ask your actuary whether the 2027 pharmacy trend assumption reflects the Caremark reinstatement or still models the exclusion period.
- If you carved out weight-loss coverage, request a run-off estimate for claims in the pipeline and a view of how diabetes-indication claims will shift the remaining mix.
- Ask your stop-loss carrier or broker how your formulary choice changed your quoted attachment and laser terms relative to sponsors who went the other direction.
- Monitor October through December pharmacy paid claims for the re-entry signal, and reconcile against the renewal worksheet’s projected claims before the contract is bound.
The directional read: plans on the reinstated template face a frequency-driven upward revision to 2027 pharmacy IBNR that surfaces within one to two valuations; carved-out plans face a smaller, slower step-down with a messy tail. Neither branch is well served by last year’s single trend assumption, and the renewal you sign this fall is priced on whichever one your data actually reflects.
Sources
- CVS Health press release: CVS Caremark delivers affordability and access to GLP-1 weight management medications with expanded coverage options (May 28, 2026)
- HRKatha: PepsiCo scraps GLP-1 weight-loss drug coverage for employees from October (August 27, 2026)
- Segal: 2027 Health Plan Cost Trend Survey (July 23, 2026)
- Bloomberg: CVS Returns Zepbound to Drug Plans After Lilly Slashes Price (May 28, 2026)
- Obesity Action Coalition: PepsiCo Says It Wants Healthcare for All Employees. Obesity Care Must Be Included. (September 2, 2026)