September 8th, 2026 – Marsh released preliminary results from its 2026 National Survey of Employer-Sponsored Health Plans, and it’s not pretty. Employer health benefit costs are projected to rise 8.2% in 2027, the largest increase since 2003 and the fifth straight year of increases. The number that gets less attention is the more useful one: 8.2% is what employers expect to pay after they make changes to their plans.
Left alone, the same coverage would cost about 11% more. Nearly six in ten employers surveyed said they plan to make design changes next year to get from 11 down to 8.
The drivers are the ones you’d guess plus one you might not. Hospital and physician prices keep climbing, provider consolidation has reduced competition in a lot of markets, and utilization is up. On top of that, Marsh actuaries estimate that rising use of GLP-1 medications for weight loss and diabetes accounts for a full percentage point of the 2027 increase all by itself. If your group has had a few employees start on those drugs this year, you may already be seeing it in your claims.
In Colorado, the individual market is drawing most of the news coverage, but small group renewals are landing in the same neighborhood, with requested increases from carriers running in the low double digits before the Division of Insurance finishes its review. What that means practically is that a business that hasn’t marketed its plan in three or four years is very likely leaving money on the table, and a business that renews on autopilot in November is agreeing to a number it never tested.
There is more room to work with than most owners realize. A fully insured plan is the simplest and most predictable, and for some groups it’s still the right answer. A level funded plan lets a group with a relatively healthy workforce pay a fixed monthly amount and get money back if claims come in under projection, which is why fully insured small group enrollment nationally has fallen from about 17 million people in 2013 to roughly 10 million in 2024. A PEO can make sense when you want larger-group pricing and payroll, HR, and compliance handled in one place. And an Individual Coverage HRA, or ICHRA, lets you give employees a defined pre-tax dollar amount to buy their own individual plan, an approach that grew 52% among small employers between 2024 and 2025.
None of those are free lunches, and it’s worth being plain about the trade-offs:
- Level funded plans are underwritten, so a group with significant claims history may not qualify, and they are not subject to all of the ACA’s benefit requirements, which gives carriers more room to raise rates or decline to renew.
- A PEO is a co-employment relationship, so you’re changing more than your health plan, and exiting one takes planning.
- With an ICHRA, your employees shop the individual market, where premiums rose and subsidies fell in 2026, and employees who take the ICHRA give up their premium tax credit.
- Every one of these can look better than your renewal on a spreadsheet and worse in practice if the provider networks don’t cover where your people actually live and get care.
If your renewal is coming up in the next few months, the useful time to look at alternatives is now, not the week the paperwork is due. We work with all of the major Colorado carriers and we’re glad to run a side-by-side comparison of what your current plan renews at against what else is available, including the level funded and PEO options. Our services are 100% FREE and there is no extra cost or mark-up, so you’ll pay the same premium for the same plan either way. Send us your current plan summary and census and we’ll show you what we find.