Rising Individual Premiums Could Grow Your 2027 Benefits Enrollment

The enhanced ACA premium tax credits expired at the end of 2025, and the individual market hasn't settled since. As you price your 2027 plan, your employees who are comparing it to outside coverage are looking at a much worse alternative than they had two years ago. This may influence how many people opt into your group health plan.  

Where the individual market stands going into 2027

KFF's July 2026 review of preliminary rate filings found that ACA Marketplace insurers proposed a median premium increase of 14% for 2027, based on 77 insurers across 16 states and Washington, DC. That comes on top of a steep 2026. The expiration of credits drove a 58% average increase in what enrollees paid out of pocket, along with deductibles that were roughly $1,000 higher per person.

Those increases pushed people out. Marketplace enrollment fell to roughly 17.5 million from 22.3 million in 2025, per KFF's May 2026 analysis. KFF notes that many of those who left were healthier, leaving a smaller, sicker group behind and fueling the 2027 rate requests.

What your own 2027 costs are projected to do

Aon's analysis of more than 1,100 US employers covering 7.9 million employees projects employer healthcare costs rising 9.5% in 2027. This increase will push average spending above $19,000 per employee, as reported by SHRM in August 2026.

That projection excludes cost-management steps, so the plan you choose may be lower depending on what you change. It would still be the fourth straight year of near-double-digit increases, with Aon putting the 2026 rise at 8.8% against 3.7% in 2022.

Three things to check before 2027 open enrollment

1. Affordability

   Federal rules cap what you can charge an employee for individual coverage, measured as a share of their income. That cap is the affordability safe harbor, and IRS Rev. Proc. 2026-26 raised it to 10.22% for 2027, up from 9.96%. Ask your benefits advisor to test your lowest-paid roles against it to be sure your plan clears the cap.

2. Account funding if deductibles rise

   IRS Rev. Proc. 2026-24 set 2027 health savings account limits at $4,500 for individual coverage and $9,000 for family coverage, with minimum high-deductible plan deductibles of $1,750 and $3,500. If you raise the deductible, consider putting employer contributions into those accounts at the same time. Employees see a deposit right away and will be able to use that money at the pharmacy counter, where the higher deductibles become reality.

3. Newly eligible employees

   Anyone who turned down your group plan back when buying their own plan was cheaper may sign up for yours in 2027. That moves your enrollment count and budget, so size the group before you finalize your choices. Pull last year's waiver list and count how many said they had coverage elsewhere.

What to tell employees during enrollment

Employees comparing your plan to an individual policy are seeing a much higher price than they paid in 2025, and many still have no idea that tax credits have gone away.

Put three things in your first communication:

• Note the increase in individual market premiums and deductibles, so people see why their outside option has changed
• Explain what your plan costs an employee at each coverage tier, stated in dollars per paycheck
• Include a single side-by-side comparison in one document

Know the plan design trade-offs

Your costs are rising by roughly 9.5% before you do anything about it, and the outside option your employees used to have has become far worse. That combination narrows the question from whether to take cost out to where you take it out, because the impact of dropping coverage value now sits squarely on people who can't replace it.

Look for savings in network design, vendor contracts, and administrative fees, where a change almost never reaches an employee's day. But increasing deductibles, out-of-pocket maximums, and reducing prescription coverage hit the employee’s pocket the hardest.

Your renewal shows you the cost side of this. The employee retention side shows up later, in who stays. Take your shortlist of changes and enrollment projections to your benefits advisor, and rank them by how visible each one would be to a family having a bad month. Working the list in that order is how you absorb a year like this one without eroding the goodwill you'll need when people have nowhere cheaper to go.

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