Survey: 54% of Small- to Mid-Sized Businesses Report Double-Digit Health Plan Premium Increases for 2027
eHealth’s 2026 survey highlights steep expected 2027 premium hikes and rising interest in alternative health coverage models among smaller employers.
Rhea-AI Summary
eHealth (EHTH) released survey findings showing that 54% of small- to mid-sized employers offering group health insurance expect double-digit premium increases for 2027.
The nationwide survey of more than 500 owners and managers of businesses with 500 or fewer employees found that over one in five report premium hikes of 15% or more. Among those facing rate increases, 80% say they were surprised by the size of the jump, including 44% who were “very surprised.”
Rising costs are driving potential benefit changes: 73% are considering dropping traditional health insurance in 2027, and 85% of them cite high coverage cost as the main reason. Overall, 85% worry they will not be able to afford group benefits within three years, while 65% of non-offering employers say they would like to provide a plan but cannot afford it.
The survey also shows growing interest in alternatives, with 58% already pursuing options such as level-funded or self-funded plans or CHOICE Arrangements, and CHOICE familiarity rising to 57% from 46% a year earlier.
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Key Figures
- Businesses facing double-digit premium increases
- 54%
- 2027 group health insurance premiums
- Businesses reporting increases of 15% or more
- Over one in five
- 2027 group health insurance premiums
- Considering dropping traditional benefits
- 73%
- 2027 employer health benefits
- Employers surprised by rate increases
- 80%
- Employers facing premium increases for next year
- Citing high cost as primary motivator
- 85%
- Employers considering dropping traditional coverage
- Worried about future affordability
- 85%
- Employers unable to afford group benefits within three years
- Pursuing alternative insurance arrangements
- 58%
- Employers surveyed
- Familiar with CHOICE
- 57%
- Up from 46% last year
Key Terms
individual coverage health reimbursement arrangements financial
level-funded financial
margin of error technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
At the same time, there's growing awareness among these business owners and managers of Custom Health Option and Individual Care Expense (CHOICE) Arrangements, with knowledge of this alternative increasing
eHealth's report, which is based on a survey of over 500 owners and managers of businesses with 500 or fewer employees, highlights the challenges small- to mid-sized employers face when it comes to offering traditional group health insurance benefits.
Key findings from the report include:
Cost concerns heading into 2027 among small- to mid-sized businesses
54% of businesses that offer group health insurance are facing double-digit group health insurance premium increases for 2027, with over one in five employers reporting a premium increase of15% or more.80% of those facing rate hikes say they were surprised by the size of the premium increase for next year, including44% who were "very surprised."73% are considering dropping traditional health insurance benefits in 2027, with85% of these citing the high cost of coverage as the primary motivator.85% worry they won't be able to afford to offer group health insurance benefits within three years.- Among businesses that don't offer employees a group health insurance plan,
65% say they would like to do so but can't afford it.
Satisfaction rates and interest in alternative options
72% express at least one point of dissatisfaction with their current coverage, with the most common issues including high premiums (29% ), unpredictable costs (19% ) and finding a plan that suits everyone (13% ).79% say administering a group health insurance plan is a burden, including41% that consider the process a "huge burden."58% report already pursuing alternative insurance arrangements other than a fully insured plan, such as level-funded or self-funded plans, or shifting to CHOICE Arrangements.57% of all small- to mid-sized employers are familiar with CHOICE, up from46% last year.
"Employers of all sizes know that offering health benefits helps them hire and retain the best workers, but our new survey shows that rising health insurance costs are making that increasingly difficult," said Derrick Duke, CEO of eHealth. "With over half of small- to mid-sized employers facing double-digit premium increases for 2027, many are responding by evaluating alternative approaches that can provide greater cost certainty and less administrative burden, while providing improved flexibility and financial assistance to employees seeking health insurance coverage."
Read the full report.
Survey methodology
eHealth's report is based on a nationwide survey of more than 500 owners and managers of small to mid-sized businesses (of no more than 500 employees), drawn from the general population. The survey was conducted by a third-party survey vendor between August 24 and 28, 2026. The overall margin of error is +/-
About eHealth
For nearly 30 years, eHealth, Inc. (Nasdaq: EHTH) has helped millions of Americans find the healthcare coverage that fits their needs at a price they can afford, using data, artificial intelligence and a consumer-first approach to help people quickly and effectively compare insurance options. As a leading independent licensed insurance agency and advisor, eHealth offers access to plans from more than 180 health insurers, including national and regional companies, supporting consumers during their working years and retirement. eHealth's licensed insurance agents help match consumers with the insurance plans, services, and support they need to live healthier, more financially secure lives. For more information, visit eHealth or follow us on LinkedIn, Facebook, Instagram, and X.
eHealth media inquiries: pr@ehealth.com
eHealthInsurance Services, Inc. is a licensed health insurance agency that does business as eHealth. In NY, IL and OK, eHealth does business as eHealthInsurance Agency. eHealth is not affiliated with the government.
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SOURCE eHealth, Inc.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What are CHOICE Arrangements mentioned in the eHealth survey?
CHOICE Arrangements, previously known as Individual Coverage Health Reimbursement Arrangements (ICHRA), are an alternative to traditional group health plans. The survey found that 57% of small- to mid-sized employers are familiar with CHOICE, up from 46% last year, and some employers report shifting to CHOICE as part of exploring alternative insurance arrangements.
How dissatisfied are employers with their current group health coverage?
The survey reports that 72% of employers express at least one point of dissatisfaction with their current coverage. Common issues include high premiums (29%), unpredictable costs (19%), and difficulty finding a plan that suits everyone (13%). In addition, 79% say administering a group health plan is a burden, with 41% calling it a “huge burden.”
How was eHealth’s employer survey conducted?
The findings are based on a nationwide survey of more than 500 owners and managers of small- to mid-sized businesses with no more than 500 employees, drawn from the general population. A third-party survey vendor conducted the research between August 24 and 28, 2026, and the reported overall margin of error is +/- 4%.