2027 Employee Benefits Costs: What to Consider Before Employees Pay More

Another health insurance increase leaves you with a difficult question: How much can your business absorb, and how much can you reasonably ask employees to pay?

As you plan for 2027 employee benefits costs, look beyond the renewal price. A change that helps your budget may also mean a larger medical bill for someone on your team.

For employers across Springfield, Decatur, Bloomington, Washington, and surrounding Central Illinois communities, the goal is practical: keep benefits affordable for the business and useful to the people who depend on them.

Why 2027 employee benefits costs are rising

Preliminary results from the 2026 National Survey of Employer-Sponsored Health Plans, released by Marsh in September, project an 8.2% average increase for 2027, even after employers make planned cost-cutting changes. Higher treatment costs and health system consolidation are among the pressures cited. Prescription drug spending adds to the challenge. mercer.com

These are national findings, not a forecast for your renewal. But they explain why employers are taking a closer look at how they divide costs.

Employers already pay a substantial share. BLS reported that private-industry employers paid 80% of single-coverage premiums in March 2025. Even keeping that percentage unchanged can increase employees’ payroll deductions when the total premium rises. 2025 A01 Results

What health insurance cost sharing means

Employees pay for health coverage in two main ways: through paycheck deductions for premiums and through bills when they receive care.

Cost sharing refers to that second category:

• Deductible: What someone pays for services subject to the deductible before the plan starts sharing those costs.
• Copay: A set amount for a covered service, such as an office visit.
• Coinsurance: The percentage someone pays for a covered service, usually after meeting the deductible.

The out-of-pocket maximum limits those costs for covered, in-network care during the plan year. After someone reaches it, the plan pays the covered costs subject to that limit. Premiums, noncovered services, and generally out-of-network expenses do not count toward it. HealthCare.gov

What are the 2027 out-of-pocket limits?

These limits come from CMS and the IRS. cms.gov

The ACA limits apply to covered, in-network essential health benefits under nongrandfathered plans, including fully insured, self-funded, and level-funded plans. “Nongrandfathered” means the plan does not have an exemption tied to certain coverage in place before the ACA. The ACA individual limit also protects each person enrolled in family coverage. CMS

These are legal ceilings, not recommended targets. Your plan can set lower limits.

Six options employers can review

1. Change payroll contributions. Increasing employees’ premium share affects every paycheck. Show the actual dollar change per pay period so employees can budget for it.

2. Raise the deductible. This asks employees to pay more for care before the plan shares certain costs. Consider whether someone could manage that bill early in the year, before building up savings.

3. Adjust copays or coinsurance. A higher office-visit copay is easy to see. A higher coinsurance percentage can be harder to budget for because the bill depends on the cost of care.

4. Raise the out-of-pocket maximum. This places more responsibility on employees who need substantial care, including people managing serious illnesses. Review that impact separately from the average employee cost.

5. Compare provider networks. Some plans offer lower costs when employees use selected doctors and hospitals. For a Central Illinois employee who already travels for specialist appointments, a smaller network could mean more driving or changing providers. Check access where employees live, not just near your office.

6. Provide HSA or FSA support. An employer contribution to a health savings account can help eligible employees cover bills. Flexible spending accounts can also help with eligible expenses, but the rules differ. A general-purpose health FSA usually prevents HSA contributions; a properly structured limited-purpose FSA may work alongside an HSA. Check eligibility, contribution limits, and plan rules before combining accounts. Internal Revenue Service

Look at who would feel the change most

National averages provide context. KFF’s 2025 survey found an average single-coverage deductible of $1,886 among workers whose plans had a general annual deductible. At employers with 10–199 workers, it was $2,631, compared with $1,670 at larger employers. KFF

Your workforce matters more than the average. A $500 deductible increase may be manageable for one employee and difficult for another who has regular prescriptions, dependents, or little savings.

Compare each option against wages, family coverage needs, and access to care. Ask whether employees could delay needed treatment because of the added expense. Consider what that could mean for attendance, morale, and retention.

Also ask how savings would reach your business. With fully insured coverage, compare quoted premiums. With self-funded or level-funded coverage, review expected claims, fees, stop-loss protection, and contract terms. A higher deductible alone does not guarantee a particular savings amount or eliminate large-claim risk.

Explain changes before 2027 open enrollment

Give employees time to understand the decision and ask questions. A useful explanation should cover:

• What is changing and when.
• The new paycheck deduction.
• What common visits and prescriptions could cost.
• Whether doctors and hospitals remain in network.
• Any employer account contribution and when it becomes available.
• Who can help compare options.

Consider smaller changes over time when feasible. Preserve required preventive coverage, and explore affordable access to ongoing care. HSA-qualified plans have specific rules about what they can cover before the deductible, including certain permitted preventive services for chronic conditions. Internal Revenue Service

Common employer questions

Do higher federal limits mean we have to raise ours?

No. Federal limits set the maximum allowed. Employers can choose plans with lower out-of-pocket limits.

Should we compare plans using the premium alone?

No. Review payroll deductions, potential medical bills, provider access, prescription coverage, and employer account contributions together.

When should we start reviewing renewal options?

Start before enrollment materials are due. Allow time to compare options, check networks, and explain changes before employees must choose.

Talk through your options with TROXELL

Before asking employees to pay more, understand what each change would accomplish and who it would affect. If you manage employee benefits in Central Illinois, talk with TROXELL about reviewing your options, weighing the trade-offs, and helping your team prepare for open enrollment.