Renewal Watch
The headline number for 2027 is the largest in two decades, and two of the causes are new: software that raises the level of the claims providers submit, and a federal payment-dispute process that is being used far more than anyone planned.
Key takeaways
- Employers surveyed expect total health benefit cost per employee to rise about 8.2% in 2027 after making plan changes, and about 11% if they changed nothing. Actuaries at health plans project a group medical trend near 9%.
- Two newer drivers sit on top of the familiar ones (specialty drugs, provider consolidation, GLP-1s): AI-assisted billing and coding, and payment disputes under the No Surprises Act.
- Your carrier can tell you how much of your increase comes from each. Most employers never ask.
The number everyone is quoting
A large national survey of employers, with preliminary results published in late summer 2026, put the expected 2027 increase in total health benefit cost per employee at 8.2%, the highest since 2003. That is after employers make the plan changes they already have planned. Without those changes the same employers expect about 11%. A separate 2026 survey of actuaries at 27 health plans put the 2027 group medical trend near 9%.
The familiar drivers have not gone away: expensive specialty drugs, GLP-1 medications, and hospital and physician groups with the market power to demand higher prices. What is different this year is that the people who model these costs are pointing at two things that barely existed in a renewal conversation three years ago.
AI-assisted billing is raising the level of claims
Software that helps providers document and code visits has become common. It can be good at its job, and that is the problem for a plan sponsor: more of the care that was delivered gets captured, and more of it gets coded at a higher level. In the actuaries’ survey, 70% of plans ranked provider AI tools among their top three cost drivers for 2027. Not everyone agrees the effect will last. At least one large carrier’s leadership has argued it will fade as payers adopt matching tools, so treat the size of this driver as an estimate.
What it means for you: part of your renewal may be a rise in the average intensity of claims rather than more care. Ask your carrier for coding-intensity data on your group and on its block of business. A carrier that cannot show it is asking you to pay for a trend it has not measured.
No Surprises Act disputes are far above projections
The No Surprises Act protects patients from surprise out-of-network bills. When a provider and a health plan disagree on the payment, an independent dispute resolution (IDR) process decides it. Federal agencies projected roughly 22,000 disputes a year. A 2026 analysis from Georgetown’s Center on Health Insurance Reforms reported about 2.6 million disputes in 2025, up 77% from 2024, and about 1.75 million in the first half of 2026 alone. Providers won roughly 85% of them, with the median winning award far above the plan’s qualifying payment amount. One state employee plan reported more than $200 million in additional IDR payments in a single year.
Those awards are paid by plans, including employer plans, and they show up in premiums or, for self-funded employers, directly in claims. The federal government has noticed: a final operations rule in May 2026 cut the administrative fee for each party from $115 to $15 for disputes started on or after June 11, 2026, and raised batching limits. It does not change how the qualifying payment amount is calculated, so it is a cleanup of the process and not a fix for the cost.
Questions to put to your carrier before the renewal letter
- Ask for a breakdown of the increase into medical trend, pharmacy, large claims, and any provision for out-of-network and IDR payments
- Ask what share of your group’s claims dollars went to out-of-network or facility-based providers last year
- Ask whether coding intensity for your group moved, and by how much
- If you are self-funded or level-funded, ask your stop-loss carrier whether IDR payments count as covered claims and how they are treated at renewal
Then compare the answers with what another carrier would offer. A renewal increase that includes an unexplained “other” line is a negotiating position, and it is much easier to move before the first of the month than after.
Questions we get
Is 8.2% what my renewal will be?
No. It is an average across employers, and it is net of changes employers make to plan design and contributions. Your own increase depends on your claims, your carrier, your funding arrangement and your size. Small and mid-size groups often see quotes above the average, and level-funded and self-funded groups see the effect through stop-loss pricing as well.
Can an employer do anything about surprise billing disputes?
Indirectly. The levers are network adequacy for facility-based specialties, the carrier’s contracting with hospital-based groups, and how a self-funded plan handles disputes with its administrator. Ask who negotiates and who decides.
Is this a reason to move carriers?
Not by itself. It is a reason to test the market, because carriers are pricing these drivers differently and the only way to see the spread is to get comparable proposals.
Sources: published 2026 national employer survey (preliminary results); 2026 actuarial survey of 27 health plans; Georgetown University Center on Health Insurance Reforms analysis of federal IDR data (August 2026); federal IDR operations final rule (May 2026). Figures are projections and survey results, not guarantees for any one group.
Related Reading
Want to know what is inside your own increase? Send us your renewal and we will tell you which of these drivers is in it and what can still be done before the effective date.
