Group renewals for 2027 are coming in hot, and clients are going to look for ways to push some of that increase to employees. Before any contribution change is finalized, it needs to clear the ACA affordability test, which moved again this year.
Here are the numbers your benefits team needs on hand for every renewal meeting this fall.
What the cost projections say
Every major survey points in the same direction:
| Source | 2027 projection |
|---|---|
| Marsh (formerly Mercer), 1,800+ employers | 8.2% average after planned changes; about 11% before. Highest since 2003. |
| Business Group on Health | 9.2% median before changes; about 8% after |
| Aon | 9.5%, pushing average cost above $19,000 per employee |
| PwC Health Research Institute | 9% group medical cost trend, highest in 17 years |
| IFEBP Pulse Survey | 10% median plan cost increase |
The drivers are familiar and compounding. IFEBP respondents named catastrophic claims (32%) and specialty drugs (21%) as the top two. Marsh estimates that GLP-1 utilization alone accounts for a full percentage point of 2027 cost growth. PwC also points to providers adopting AI documentation and coding tools, which is producing more claims coded at higher levels.
The response is predictable. Marsh found 59% of employers plan cost-cutting changes for 2027, including higher deductibles and other design changes that raise member out-of-pocket costs. Its data also shows many employees will see paycheck deductions rise faster than the overall cost increase.
The 2027 affordability percentage: 10.22%
In Rev. Proc. 2026-26, the IRS set the ACA affordability percentage at 10.22% for plan years beginning in 2027. That’s up from 9.96% in 2026, 9.02% in 2025, and 8.39% in 2024. It is the highest the percentage has been.
For applicable large employers (generally 50 or more full-time employees, including equivalents), coverage is affordable if the employee’s required contribution for the lowest-cost, self-only, minimum-value option doesn’t exceed 10.22% of household income. Since employers don’t know household income, they use one of three safe harbors:
- Federal poverty line: the most conservative option. For 2027 calendar-year plans in the mainland U.S., the maximum monthly employee contribution is $135.92, up from $129.89 in 2026.
- Rate of pay: based on hourly rate or monthly salary.
- Form W-2: based on Box 1 wages. Example: an employee with $32,000 in W-2 wages could be charged up to $272.53 per month for self-only coverage ($32,000 × 10.22% ÷ 12).
The higher percentage gives employers a little more room to raise contributions. But with costs rising 8% or more, that room gets used up fast. Run the numbers on your lowest-paid full-time employees, not the average employee. The test applies to self-only coverage only. Family tier contributions aren’t part of the calculation.
For non-calendar-year plans, use the percentage in effect at the start of the plan year.
2027 account limits: where things stand
| Limit | 2027 | Status |
|---|---|---|
| HSA, self-only | $4,500 | Final (Rev. Proc. 2026-24) |
| HSA, family | $9,000 | Final (Rev. Proc. 2026-24) |
| HSA catch-up (55+) | $1,000 | Statutory, not indexed |
| Health FSA salary reduction | $3,500 projected | Pending. Marsh projection; the IRS typically confirms in late October or November |
| Health FSA carryover | $700 projected | Pending |
| Dependent care FSA | $7,500 ($3,750 married filing separately) | Statutory; unchanged from 2026 |
If enrollment materials go out before the IRS publishes the FSA figure, either use the 2026 limit of $3,400 with a note that it may increase, or build in a mid-enrollment update. Don’t print $3,500 as final.
Don’t miss October 15: Medicare Part D notices
Employers that offer prescription drug coverage must notify Medicare-eligible participants, before October 15 each year, whether that coverage is creditable. The deadline lines up with the start of Medicare’s Annual Enrollment Period. With plan designs shifting for 2027, especially higher-deductible options, confirm the creditable status determination for each group. Don’t assume last year’s notice still applies.
The workload nobody budgets for
When 59% of employers are changing plan designs, open enrollment stops being a paperwork exercise. It becomes a question-answering exercise. Employees want to know why their deduction went up, whether the new HSA plan fits them, and whether their medication is still covered. Every one of those questions lands on someone at your agency or your client’s HR team.
Our open enrollment support teams handle census reconciliation, eligibility and enrollment data entry, carrier file preparation, and first-line employee questions. Your benefits consultants stay focused on plan strategy and the renewal meeting.
Frequently asked questions
What is the 2027 ACA affordability percentage?
10.22% of household income for plan years beginning in 2027, per IRS Rev. Proc. 2026-26. It applies to the employee’s required contribution for the lowest-cost, self-only coverage that provides minimum value.
Has the IRS released the 2027 health FSA limit?
Not as of this writing. Marsh projects $3,500 with a $700 carryover. The IRS usually publishes the official figure in late October or November.
How much are employer health costs expected to rise in 2027?
Projections range from about 8% (after plan changes) to around 11% (before changes), depending on the survey. Marsh’s 8.2% post-change estimate would be the highest increase since 2003.
When are Medicare Part D creditable coverage notices due?
Before October 15 each year, to all Medicare-eligible individuals covered under the employer’s prescription drug plan.
Get open enrollment help lined up now
If your November enrollment calendar is already full, let’s talk about what we can take on. Book a 30-minute call.