Insurers are asking for a median 14 percent premium increase on small group health coverage for 2027, according to a Peterson-KFF Health System Tracker analysis of preliminary rate filings published August 7, 2026, up from the 11 percent median increase insurers sought for 2026.
KFF researchers reviewed filings from nearly 300 insurers selling small group plans, the coverage employers with fewer than 50 workers typically buy, across all 50 states and Washington, D.C. Most insurers are requesting increases between 10 and 20 percent, and six are seeking more than 30 percent. Insurers cite rising hospitalization and physician costs, higher prescription drug spending including GLP-1 medications, and provisions tied to the No Surprises Act as the main cost drivers. The increases land on a market that is already shrinking: small group enrollment has fallen from 17 million people in 2013 to 10 million in 2024, as more small employers shift to self-insurance or drop group coverage altogether, a dynamic that has already pushed ICHRA adoption to stall while employers wait for marketplace stability and helped drive the record-high job lock that benefits teams are now absorbing.
For HR and benefits leaders at small and mid-size employers, a second straight year of double-digit renewal increases turns the fall open enrollment conversation into a plan-redesign conversation, not a rate-shopping one. The original insight here is where the money is likely to move next: as fully insured group premiums keep outpacing alternatives, the benefits-tech vendors gaining ground are the ones selling defined-contribution and individual coverage HRA setups that let a small employer fund a fixed amount rather than absorb whatever the next renewal quote brings. Shrinking group enrollment is not just an insurance statistic, it is a leading indicator of which benefits administration platforms small employers will be evaluating this fall.
