Early 2027 ACA rate signals: What employers need to know before open enrollment

Every summer, carriers file proposed rates with state insurance departments for the year ahead. State regulators review and often negotiate those numbers before finalizing them. For employers offering an ICHRA, this filing season matters, since the outcome directly shapes what individual coverage will cost employees during open enrollment.

Where rates stand right now

• Most states filing so far are showing double digit increases

• Last year included a wave of 20 to 30 percent increases in some markets, driven by the expiration of enhanced premium tax credits and the uncertainty that followed

• This year's numbers, while still elevated, are trending lower overall

• The two states with finalized rates, California and Massachusetts, both came in below their originally proposed rates, settling around a 10 percent increase

• See Take Command’s ACA Rate Tracker for specific rate filing data

That's a meaningful shift. Last year, uncertainty pushed some proposed rates even higher by the time they were finalized. This year, the opposite is happening so far.

The pattern suggests the market is absorbing a one time shock rather than entering structural decline. Last year's spike traced back to a specific policy event. This year looks more like the ripple effects working through the system, layered with ongoing medical cost inflation.

Why rates are moving this way

Two forces are driving most of what employers are seeing:

• Medical cost inflation. This trend carried over from last year and shows no signs of slowing.

• A shrinking, less predictable risk pool. Carriers continue adjusting pricing as they assess who is staying in the individual market and who is leaving.

These pressures aren't unique to ICHRA. Group plans, self-funded employers, and stop loss carriers are feeling similar cost pressure this year. In most states, individual market increases are tracking closely with small group increases, which is a useful sign. If individual rates were climbing sharply while small group rates stayed flat, that would point to a problem specific to the individual market. That isn't what the data shows.

What this means for contribution strategy

Preliminary rate data is an early planning signal, not a final answer. Waiting until fall for final rates means losing time to plan thoughtfully instead of reacting under pressure.

A few things to keep in mind:

• Look past national and state averages; rate movement varies significantly by state, metro area, and carrier

• A 15 percent national average increase can still include carriers asking for just 0 to 5 percent in a given market

• Applying a blanket increase to contribution levels based on a headline number risks overcorrecting

• The more useful exercise is understanding exactly where employees live and which carriers and plans are actually available to them

The affordability picture for 2027

The IRS affordability threshold is rising from 9.96 percent in 2026 to 10.22 percent in 2027.¹ This gives employers more room to shift cost to employees while still meeting affordability requirements under the employer mandate.

That flexibility is worth using carefully:

• The technical affordability standard is one thing; the actual cost impact on employees is another

• Two carriers offering comparable silver plans in the same market can move very differently, one up 20 percent, another flat

• If employees are concentrated with the carrier seeing the steeper increase, that's where the real conversation needs to happen

This dynamic is also shifting employee buying behavior, with more people moving from gold to silver or silver to bronze plans than in previous years. Expanded HSA eligibility has likely accelerated that shift.²

Plan choice matters more than the headline number

A common misconception: a rate increase in the individual market means employers have to match that increase in their own contribution strategy. In most cases, that isn't true.

Because employees can move between plans and carriers, a spike in cost with one carrier doesn't have to become a spike in cost for the employer or employee, as long as other options exist.

This is where the breadth of an ICHRA administrator's carrier and plan lineup matters:

• A narrow set of plan options leaves employers more exposed to whatever increases those specific carriers apply

• A broader marketplace, spanning on exchange and off exchange options, gives employees room to shift to a comparable plan without absorbing the full increase

• The impact doesn't disappear entirely, but it can be softened considerably when real choice is built in

Key trends to watch before open enrollment

• Don't read headlines at face value. A carrier exiting the individual market may generate attention due to brand recognition, but the actual market impact depends on how much share that carrier held in a given state.

• Watch what doesn't make the news. Carriers expanding their footprint rarely get coverage, even though it often matters more to employers and employees.

• Compare individual rates to small group and stop loss trends, not just individual market headlines, for a fuller picture.

• Expect standard deductible and out of pocket increases for 2027, consistent with prior years.

• Some policy changes around network coverage and pharmacy benefits are on the horizon, but expected to land in 2028, not 2027.

For a fuller look at how ICHRA adoption is holding up nationwide amid ACA Marketplace pressures, read the 2026 HRA Council Data Report.

Common mistakes to avoid

The fix for both: start the conversation early, and treat the decision as a genuine evaluation rather than a last resort or a pure cost cutting exercise.

Supporting employees through more choice

ICHRA's biggest advantage, expanded plan choice, can also be a source of employee anxiety without the right support. A traditional group plan might offer two or three options. An ICHRA marketplace can include over 100 distinct plan designs.

Employers who see the best outcomes invest in clear communication before launch, helping employees answer a few key questions upfront:

• Which providers do I currently use?

• What prescriptions do I take?

• What health needs do I expect in the coming year?

Pairing that guidance with real human support, whether through an enrollment advisor or a knowledgeable broker, consistently produces better outcomes than leaving employees to navigate a large marketplace alone.

Planning ahead for renewal

The same principle applies whether renewing an existing ICHRA program or considering a switch from a traditional group plan: start early.

• Unlike a traditional group renewal, ICHRA doesn't arrive with a single letter stating a new premium

• It requires tracking rate movement across states, carriers, and markets over several months

• Positioning ICHRA as a multi year strategy, rather than a single annual decision, changes the conversation considerably with finance stakeholders

• Flagging a likely mid single digit to low double digit increase six months in advance is a very different conversation than surprising a CFO with a steep number in October

• Early visibility turns what could be a stressful annual surprise into a predictable part of the planning calendar

Ready to see what 2027 rate trends mean for your workforce?

Take Command's team can walk through the local market data behind these numbers, state by state, carrier by carrier, and help build a contribution strategy that holds up through open enrollment. Contact Take Command to get started.

References

1. Internal Revenue Service, Rev. Proc. 2026-26 (July 2026). https://www.irs.gov/pub/irs-drop/rp-26-26.pdf

2. Internal Revenue Service, Rev. Proc. 2026-24, 2027 inflation-adjusted HSA and HDHP limits (July 2026). https://www.irs.gov