Your group health insurance renewal is about to land on your desk, and if it looks like last year’s, the number is going to sting. Group health insurance premiums have been climbing steadily for years, and the increases coming for 2027 are some of the steepest in a long time. But a renewal is an offer, not a verdict. Most employers have more room to negotiate, redesign, or re-shop than they realize.
What Group Health Insurance Premiums Cost Today
The average employer-sponsored family plan now costs about $27,000 a year in total premium, the employer’s share and the employee’s share combined. Single coverage averages about $9,300. Family premiums rose 6% last year alone and are up 26% over the past five years, according to the KFF Employer Health Benefits Survey.
Small employers often feel it more. At smaller companies, employees pay a noticeably bigger share of the family premium out of their paychecks than workers at large companies do. That gap matters when you’re competing for the same people.
Claims Are the Biggest Factor in Your Renewal
Texas insurers have filed for an average increase of about 17% on small group plans for 2027. But averages hide the real story. What happens to your premium depends heavily on your own group.
“The biggest difference I’m seeing this year is claims. I’ve got one group with huge claims looking at a 51% increase, and another group at 8%.”
Susana Gibb, owner, GIBB Insurance Services
Both of those groups are on partially self-funded plans, where the renewal is based on that group’s own claims. The 51% group has 70 employees. The 8% group has three. Size didn’t protect the bigger company, and being small didn’t hurt the little one. Claims made the difference.
If your plan is partially self-funded, or your group has 51 or more employees, your claims history follows you into renewal. A cancer diagnosis, a premature baby, or a major surgery can all show up in the number.
Smaller groups on a traditional fully insured plan are priced differently. The insurer looks at things like employee ages and location, not your group’s individual claims. That’s why it’s worth knowing exactly which kind of plan you have before your renewal arrives.
When claims drive the increase, you still have options
- Re-shop the market. Other insurance companies weigh your claims history differently.
- Reconsider how your plan is funded. After a rough claims year, a small group on a partially self-funded plan may come out ahead moving to a fully insured plan. After a healthy year, the reverse can be true.
- Look at plan design. Deductibles, networks, and plan options still move the number.
Your Renewal Is a Starting Point
The biggest mistake we see is signing the renewal as written because it feels like the only option. It’s not. Before you accept it, you have several levers to work with.
Re-shop the market. Every insurance company prices risk differently, and one carrier’s 18% increase can be another carrier’s single digits for the same group. If you only ever see one carrier’s renewal, you’re only seeing one carrier’s math.
Adjust the plan design. Raising the deductible, changing copays, or moving from a PPO to an HMO can bring the premium down. High-deductible plans paired with a health savings account (HSA) typically carry lower premiums than PPO plans. The tradeoff is more out-of-pocket cost at the doctor, which an employer HSA contribution can soften.
Offer more than one plan. Many carriers let you offer two or three options side by side. Employees who want a richer PPO can buy up; employees who rarely see a doctor can choose a lower-cost plan. You control your cost by setting your contribution, not by forcing one plan on everyone.
Rethink your contribution strategy. You don’t have to pay the same percentage for everyone. A common approach is covering most of the employee’s own premium and a smaller share for spouses and children. That keeps the benefit strong for your team while putting a ceiling on your exposure.
Ask about partially self-funded plans. Depending on group size and health, some employers qualify for partially self-funded plans, which can return money in a good claims year. They aren’t right for everyone, and they carry risks a fully insured plan doesn’t, but they’re worth asking about.
Don’t cut the benefit, reshape it
Dropping coverage entirely often costs more in turnover than it saves in premium. Reshaping the plan, or changing who pays what, usually gets you most of the savings without losing the people you worked hard to hire.
Timing Matters More Than You Think
Most carriers send small group renewals 30 to 60 days before your renewal date. That’s not much time to compare carriers, collect employee information, and get a new plan approved. If your plan renews January 1, the time to start shopping is now, not mid-December.
Small Groups Count Too
You don’t need a big company to benefit from group coverage. In Texas, a group can be as small as two employees, including a married couple who both work in the business. For many owners, that opens up provider networks and PPO options that are hard to find any other way.
If participation rules kept you out of group coverage before, read what’s changed in group health insurance for small business.
Why It Pays to Have an Independent Agent at Renewal
A renewal is only as good as the alternatives you put next to it. As an independent agency, GIBB Insurance Services shops your group across multiple insurance companies every renewal, so you’re comparing real options instead of taking one carrier’s word for it. A captive agent tied to one company can’t do that.
Got a renewal on the way?
We’ve helped employers across DFW and The Woodlands build and manage group health plans since 1997. Whether your renewal just arrived or you want to see what a group plan would cost your team, we’ll put real options side by side.