The short answer for 2027
For a group whose claims ran about as expected, a reasonable 2027 renewal is roughly 8% to 11%. That's medical trend, the rise in health care cost per person. PwC projects 9.0% for employer plans. Segal projects 9.9% for medical and 11.5% for prescription drugs.
Employers expect about the same. Mercer's survey puts 2027 cost growth at 8.2% after plan changes and 11% before, the highest since 2003. Aon projects 9.5% before plan changes.
Small groups are running higher. Insurers' 2027 small group filings ask for a median increase of 14%, with the middle half between 10% and 18%, according to Peterson-KFF.
Trend is the starting point, not the answer. A reasonable increase for your group is trend plus whatever your own experience justifies. Anything beyond that, the carrier should be able to explain.
Why there's no single number
It depends on how your plan is priced.
- Small groups. Fully insured groups under 50 employees (under 100 in California, Colorado, New York and Vermont) are priced on the insurer's whole pool. The renewal is the insurer's filed rate change, plus a year of age, plus any plan change. Your own claims don't count. Compare your increase with what your carrier and its competitors filed for your state at ratereview.healthcare.gov. Part of why 2027 filings run above trend: healthier groups are leaving the pool for level-funded plans, and the members left behind cost more.
- Larger fully insured groups. These are experience-rated. The carrier blends your claims with its standard rate, weighted by credibility. Your claims move what's reasonable.
- Level-funded plans. The carrier re-prices the plan each year on your claims, much like experience rating. Check the stop-loss and surplus terms too, since they can change at renewal.
- Self-funded plans. There's no renewal premium. Compare the growth in your claims cost per person with trend, and look at the stop-loss renewal on its own.
Build your reasonable range
For an experience-rated group, here's a rough check. Start with trend. Then adjust for how far your claims ran above or below what the current premium was priced for, scaled by credibility.
Reasonable increase ≈ (1 + trend) × (1 + credibility × claims gap) − 1
Take a group with 100 employees, 250 covered members and a $2,000,000 premium. Under the square-root rule on the Credibility page, 250 members get 50% credibility.
| If claims ran | Reasonable increase |
|---|---|
| As priced | +8% to +11% |
| 10% over | +13% to +17% |
| 10% under | +3% to +5% |
On $2,000,000, that's $160,000 to $220,000 when claims ran as priced, $268,000 to $331,000 after a bad year, and $52,000 to $109,000 after a good one.
"10% over" means claims came in 10% above what the premium was built to cover. If the carrier priced for an 85% loss ratio, that's a loss ratio of about 94%. At 50% credibility, half of that gap carries into the rate.
This is a sense check, not a pricing method. It leaves out large-claim pooling, age and enrollment changes, fees, and the fact that carriers often apply trend over 18 months or more. Real renewals include all of those. Why Did My Renewal Increase? covers each one.
Where the Renewal Checker fits
The Renewal Checker tests your offer against trend alone, using the same 8% to 11%. It can't see your claims. So the group whose claims ran 10% over gets "Above trend" at +15%, and here that's expected. The group whose claims ran 10% under gets "Below trend" at +4%. That's expected too, but it's still worth confirming nothing was left out.
When an increase above your range can still be fair
- An older workforce or a shift in enrollment. Everyone is a year older at renewal. More family coverage or growth in a higher-cost area adds more.
- A plan design that hasn't changed. When the deductible stays put, trend lands on the plan's share and grows faster. That's leveraged trend.
- Ongoing large claims. A member in active treatment can keep costs high into the new year.
- Catch-up. If last year's rate was too low, this year's has to make up ground. That's what happens when a rate isn't actuarially sound.
The test is the same for each: can the carrier show you what each piece adds, in dollars?
When a low increase isn't good news
A renewal below trend, for a group whose claims ran as expected, may mean the price is short. The carrier may have assumed lower trend, trimmed its margin or held to a rate cap. None of that makes the plan cheaper to run. If claims grow at trend, the next renewal catches up.
The Actuarially Sound page works through an example: a quote $100,000 cheaper comes up $60,000 short, and the next increase is about 16% instead of 7%. If your offer looks low, ask whether the rate is guaranteed for the full year and what next year is likely to look like.
If your offer is outside your range
Ask your broker or carrier three things:
- What trend did you use, and over how many months?
- How much weight did our own claims get, and how far did they run from what was priced?
- What does each piece above trend add, in dollars?
For the full list, see the seven questions to ask before accepting a renewal. If the answers still don't add up, get an independent second opinion.