Why Your 2027 Rates Are Being Built Right Now
Every summer, carrier actuaries lock in the trend assumptions that drive next year's renewals. This summer, those assumptions are ugly.
- PwC's Behind the Numbers survey of actuaries at 27 US health plans projects a 9% group medical cost trend for 2027, the highest in nearly two decades. PwC also revised its 2026 group trend upward to 9%.
- Mercer's national employer survey pegged 2026 cost growth at 6.7% per employee, the highest in 15 years, and that was after employers made plan changes. Before changes, the projection was nearly 9%. Average cost per employee is expected to exceed $18,500.
- KFF's 2025 Employer Health Benefits Survey put the average family premium at $26,993 a year.
Trend is the raw material of your renewal. When a carrier says "9% trend," that's the starting point before anyone looks at your group. Add an aging census or a rough claims year and the first number on your renewal letter can land in the mid-teens.
None of this means you accept a 9% increase. It means the default path is expensive, and the default path is what an autopilot renewal delivers.
The 25-100 Problem: Big Enough to Deserve Better, Small Enough to Get Ignored
This size band plays two different games in Ohio, and plenty of employers were never told which one they're in.
- 25 to 50 employees: You're in Ohio's ACA small group market. Community rating. Your premium is built from employee ages, location, family size, and tobacco use. Your group's actual claims barely move the number. Your leverage lives in plan design, network, funding structure, and shopping the market properly.
- 51 to 100 employees: You're experience rated. Your own claims history drives the renewal, blended with the carrier's book through credibility weighting. Your leverage lives in understanding your data and making the carrier defend its assumptions.
Two different games. Same failure mode: a broker who emails the renewal in late October with three quotes and a shrug. We wrote about that pattern in What Should You Expect from Your Benefits Broker? If your renewal process is four weeks long, you don't have a process. You have a deadline.
The Five-Month Playbook
July: Get the data and set the calendar.
- Request your renewal history, current rate sheets, and a clean census: ages, zip codes, coverage tiers, dependents.
- If you're over 50 lives, request whatever claims and large-claim detail your carrier will release. If the answer is "nothing," write that down. It matters at decision time.
- Book a strategy meeting with your broker before Labor Day. Not a renewal meeting. A strategy meeting.
August: Model the alternatives before you need them.
- Benchmark your plan design and contributions against comparable Ohio groups. We run this through R2I's analytics engine so the conversation starts with data, not hunches.
- Run the funding feasibility question: fully insured versus level-funded. Quotes require a current census and take weeks, not days.
- Write down your decision criteria now. What increase triggers a full market shop. What would make you change funding.
September: Go to market on your timeline, not the carrier's.
- Release your census and RFP while underwriters still have capacity. By late October they're buried and you have no negotiating leverage.
- Put level-funded quotes in motion if the August modeling earned it.
- Pressure-test the design levers: Rx tiers, telehealth, spousal provisions, HSA-qualified options.
October: Negotiate the renewal, don't just receive it.
- Fully insured 1/1 renewals typically release in early to mid-October. Now you have context: competing quotes, funding alternatives, benchmarks.
- Make the carrier defend the number. What trend did they assume? What changed in the census? For 51+ groups, how much credibility did your own experience get?
- A renewal negotiated with alternatives on the table is a different conversation than one negotiated against a blank page.
November: Decide by the 15th and start communicating.
- A final carrier and funding decision by mid-November protects your open enrollment window.
- Model contributions. If you're an applicable large employer (generally 50 or more full-time equivalents), test your lowest-cost plan against the 2027 ACA affordability percentage once the IRS releases it late this summer. The 2026 figure is 9.96% of household income.
- Tell employees what's changing, what it costs, and why. Silence breeds turnover.
December: Execute enrollment, then lock the paperwork.
- Wrap open enrollment by early December. Carrier paperwork and final elections are typically due mid-December for a 1/1 effective date.
- Confirm ID cards, payroll deductions, SBC distribution, and COBRA notices before the holidays eat your calendar.
The Funding Question You Owe Yourself by September
Per KFF's 2025 survey, 37% of covered workers at firms with 10 to 199 employees are now in level-funded plans. This stopped being exotic years ago.
In plain terms: a level-funded plan feels like a fully insured plan. Fixed monthly bill, stop-loss protection behind it. The difference is what happens to the money. If claims run under budget, a portion of the surplus comes back to you at year end, depending on the contract. And you receive your own claims data every month instead of a "trust us" at renewal. We broke down that data advantage in The Hidden Transparency Advantage of Level-Funding.
It's not for everyone. Healthy demographics often price well below community rates. Groups carrying heavy ongoing claims usually do better staying in the ACA pool. That's the point of modeling it in August instead of guessing in November. For the savings math at this size, see How Mid-Size Employers Capture 15-25% Savings Without Catastrophic Risk.
Five Questions to Ask Your Broker Before August 1
- "What trend assumption is our carrier using for 2027, and what does that mean for our starting number?"
- "When exactly does our renewal release, and what's our negotiation window after that?"
- "Have you modeled level-funded alternatives for our group? Show me the numbers, not the opinion."
- "What data can we get on our own group, and have you requested it yet?"
- "If the renewal lands above 10%, what's the plan, and when did it start?"
If those questions produce silence, forwarded emails, or "let's wait for the renewal," you've learned something important with five months still on the clock.
What Good Looks Like by Labor Day
- Census scrubbed and current
- Renewal history and available claims data in hand
- Benchmarks run against comparable Ohio groups
- Funding feasibility modeled, with real quotes in motion
- Decision criteria written down
- Market strategy set, RFP ready for a September release
Six items. About seven weeks. Entirely doable if it starts now.
A 1/1 Renewal Should Be a Decision, Not a Deadline
We built R2I around this exact gap: local Columbus service backed by the kind of analytics national brokerages reserve for their 500-life clients. R2I's analytics engine models your renewal scenarios, funding alternatives, and contribution strategies before the carrier ever mails the letter, so the October conversation starts with our number instead of theirs.
If your plan renews January 1, 2027 and you'd like a second set of eyes before the market gets crowded, we offer a free, no-obligation renewal review. Bring your current rates and census. We'll show you what the data says, and you decide what to do with it. No pitch, no pressure. You can also reach us at (614) 636-4422.
Common Questions About 1/1/2027 Renewals
When should a 25-100 employee company start working on a 1/1/2027 renewal?
July and August 2026. That preserves time to gather data, model funding alternatives, and go to market in September, so you negotiate the October renewal with alternatives in hand and decide by mid-November.
How large will 2027 renewal increases be?
Health plan actuaries surveyed by PwC project a 9% medical cost trend for 2027, the steepest in nearly two decades. Your number depends on your size, rating method, census, funding, and negotiation. A first offer is a starting point, not a verdict.
Is level-funding worth evaluating at 25 to 100 employees?
Usually worth evaluating, not always worth choosing. About 37% of covered workers at 10-199 life firms are in level-funded plans. Groups with favorable demographics often price below community rates and gain monthly claims data. Groups with heavy ongoing claims may be better served in the ACA pool. Model it with real quotes before deciding.
