How Should I Budget for 2027 Health Costs?
Start with a range of 8 to 10 percent, which spans the national employer surveys and sits around the 9.6 percent Michigan small-group average. Apply it to your annual premium, divide by enrolled employees to see the per-person effect, then tighten the range when your renewal arrives.
From a percentage to a budget
The chart and table apply each estimate to a $500,000 premium and to three premium sizes. This is arithmetic on round numbers, not a forecast for any group.
| Annual premium | 8.0% increase | 9.6% increase | 10.0% increase | 14.2% increase |
|---|---|---|---|---|
| $250,000 | +$20,000 | +$24,000 | +$25,000 | +$35,500 |
| $500,000 | +$40,000 | +$48,000 | +$50,000 | +$71,000 |
| $1,000,000 | +$80,000 | +$96,000 | +$100,000 | +$142,000 |
Step 1: set the range
Use 8 to 10 percent as a starting range, and a higher figure if your group had a high-claims year.
Step 2: apply it to premium
On a $500,000 premium each percentage point is $5,000 a year, so 8 to 10 percent is $40,000 to $50,000.
Step 3: per employee
$48,000 across 25 enrolled employees is $1,920 each per year, or $160 a month, before any change in how the cost is shared.
Decide who absorbs it
The same increase can be absorbed, shared or reduced. Each choice has a different effect on employees.
Employer, employee or plan design
The increase can be absorbed by the employer, shared through higher employee contributions or reduced through plan design such as a higher deductible. How your claims drove the renewal shows which is realistic.
Work backward from the effective date
Gather data at 120 days, set strategy at 90, market the plan at 75, read the renewal at 60, decide at 45 and enroll at 30.
Check the range
See where the 8 to 10 percent range comes from and what moves your own number.
2027 market outlook questions.
Should the budget be higher for a small group?
Not automatically. Use the range, then adjust for your group’s own claims experience and the carrier-level filings.
How do I budget if I am self-funded?
Budget expected claims, administration and stop-loss premiums separately, and use the national trend as a reference for claims.
When should I update the budget?
When the carrier’s renewal arrives, and again if you change plan design or market the plan.
Where the figures come from.
Business Group on Health 2027 Employer Healthcare Strategy Survey Bridge Michigan, Michigan 2027 rate announcement KFF 2026 Employer Health Benefits Survey
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →