Small group insurers want 14% more in 2027. Do you have to pay it?

What number is your carrier going to put in front of you for 2027?

If you have under 50 employees, the median request across nearly 300 small group insurers is 14%. That is up from 11% the year before.

Why it matters: rate filings are the earliest honest signal of what you will actually pay. About 59% of carriers are asking for 10 to 20%. Another 15% want more than 20%. Regulators still trim these, but the direction is set.

What is driving it, per the filings themselves:

• The median insurer expects medical costs to rise 10.8% in 2027, on both price and utilization.
• Specialty drugs and GLP-1s show up in filing after filing as a named driver.
• The small group pool is thinning. Healthier groups keep leaving for level-funded arrangements, which leaves a sicker population behind and pushes next year's rate higher. Carriers say so in their own filings.
• Small employers are already dropping out. Only 51% of firms under 25 employees offered coverage last year, against 97% of firms over 200.

That last dynamic is the one worth sitting with. Every healthy group that exits makes the pool worse for whoever stays. Staying put is not a neutral choice.

The useful response is not to accept the number or to cut the benefit. It is to find out what you are actually buying. Level-funded recovers 8 to 15% of the margin your carrier is keeping and gets your claims data back, so next year's renewal is a conversation you can have with evidence. A defined contribution model, now called a CHOICE Arrangement, converts the whole thing into a budget line you set. Pharmacy contract terms and payment integrity can move without waiting for the renewal at all.

None of that requires cutting coverage or shifting cost onto your staff.

Your renewal letter is a proposal, not an invoice. What got delayed this year that a flat renewal could have funded?

Sources: https://www.kff.org/health-costs/how-much-and-why-premiums-are-going-up-for-small-businesses-in-2027/ https://www.hrdive.com/news/small-business-health-insurance-premiums-2027-kff-rate-filings/827332/