If you offer health insurance to your employees through a small group plan - a SHOP exchange, a state-based marketplace, or directly from an insurer - your premiums likely went up this year.
Not a little. The median increase for small group plans in 2026 is 11%.
That number comes from a non-partisan source: the KFF Health System Tracker, which reviewed preliminary rate filings from 318 insurers offering ACA-compliant small group coverage across all 50 states and the District of Columbia. Unlike vendor surveys or insurer press releases, this is regulatory filing data - the actual numbers insurers submitted to state regulators when justifying their 2026 pricing.
The full analysis is available at healthsystemtracker.org.
What the Data Actually Shows
The median proposed premium increase among those 318 insurers is 11%. The range is wide: some insurers filed for decreases as small as -5%, while others requested increases as high as 32%.
But the distribution is not balanced toward the low end:
- 68% of insurers (216 out of 318) are requesting increases between 5% and 15%
- About 10% (31 insurers) are proposing increases of 20% or more
- Only 3 insurers filed for rate decreases
In plain terms: most small group plan members are looking at increases somewhere in the 5-15% range. A meaningful minority are looking at far more than that.
For a small business paying $1,200 per employee per month for family coverage - a roughly average figure for a small group plan - an 11% increase adds $132 per month per employee. For a business with 10 employees on family coverage, that's $1,320 per month, or nearly $16,000 per year, added to the insurance budget with no change in service.
What's Driving the Increases
KFF reviewed detailed rate filings from 96 insurers across 16 states to understand the specific factors insurers cited. Several patterns emerged consistently.
Rising healthcare costs are the primary driver. The underlying cost of providing care - hospitalizations, physician visits, specialist services - continues to increase. Insurers commonly estimate their medical trend (a combination of price increases and higher utilization) at around 9% for 2026. Premium increases track that trend.
GLP-1 drugs are a new and significant factor. Medications like Ozempic and Mounjaro, primarily prescribed for diabetes and weight management, have seen explosive growth in utilization. They are also among the most expensive drugs on the market, running $800 to $1,200 or more per month without rebates. Insurers are explicitly citing GLP-1 utilization in their rate filings as a factor requiring premium adjustments. This is a cost driver that didn't exist at meaningful scale three years ago.
Provider consolidation is raising reimbursement rates. When hospital systems and physician practices merge, they gain pricing power in their negotiations with insurers. That results in higher reimbursement rates, which get passed on through premiums. Several insurers in the KFF analysis specifically cited increased provider consolidation as reducing market efficiency and raising their costs.
Tariffs on pharmaceuticals and medical supplies are a newer factor. Of the 96 insurers reviewed in detail, 23 specifically mentioned tariff-driven cost uncertainty in their rate-setting. Some built tariff risk into their premiums; others did not. This creates additional variance between plans.
Declining enrollment in the small group market is worsening the risk pool. As fewer businesses offer insurance - only about 1 in 3 small businesses currently offers health coverage, per NFIB data - the pool of people covered in small group plans shrinks and skews toward people with higher utilization. That's an actuarial reality that pushes premiums up, independent of any of the other factors above.
Who Gets Hit Hardest
Small businesses in states with less competitive insurance markets tend to see larger increases because fewer insurers are competing for their business. If your state has two or three small group insurers, those insurers have more pricing latitude than in a state with eight or ten options.
Businesses with older or less healthy employee populations face higher premiums because insurers in the small group market can adjust rates based on the health of the group (within limits set by state and federal law). If your team has had significant claims in the past year, renewal pricing will reflect that.
Industry also matters. Construction, healthcare workers, and food service employees tend to have higher claim rates than technology or finance employees. Industry classifications are often factored into small group pricing.
What Small Employers Are Actually Doing
The 11% median increase is an industry-wide average. Individual employers have more options than the headline suggests.
Shop the market before your renewal date. Many small employers accept the renewal offer from their current insurer without comparison shopping. In a year with large rate increases, the spread between the highest and lowest-cost plans in a given market can be 15% or more. Getting at least two competitive quotes is worth the time.
Consider High-Deductible Health Plans paired with HSAs. High-deductible plans carry lower premiums, and pairing them with a Health Savings Account lets employees contribute pre-tax dollars toward out-of-pocket costs. This structure is increasingly common among small employers looking to control premium costs while maintaining meaningful coverage.
Evaluate cost-sharing structure. If you've been absorbing 100% of employee premiums and contributing toward dependent coverage, re-examining contribution percentages is worth a conversation. Contribution structures vary widely; some employers contribute 80% for employees and 50% for dependents, others do flat dollar amounts. Adjusting the structure is different from eliminating coverage.
Work with a benefits broker. Independent brokers who specialize in small group coverage can compare plans across carriers and navigate the SHOP marketplace on your behalf. They're typically paid by the carrier, not the employer, and can identify plan designs and pricing options that aren't obvious in a direct search.
Look at PEO arrangements. A Professional Employer Organization pools employees from multiple small businesses into a larger group, which can access better rates and plan options than a 10-person company could on its own. The tradeoff is administrative overhead and fees. For businesses in the 5-30 employee range, a PEO comparison is worth doing at renewal.
The Context Worth Keeping
The average premium increase for small group plans has been running in the 5-8% range in recent years. An 11% median is above trend. The combination of GLP-1 drug adoption, provider consolidation, and tariff uncertainty has created an unusually expensive claims environment for 2026 specifically.
These rates are finalized each fall. If you're mid-plan-year and not up for renewal yet, now is the time to model what a 10-15% increase would mean for your benefits budget and begin exploring alternatives.
The businesses that get ahead of this are the ones that start the comparison process 90 to 120 days before their renewal date, not two weeks before.
Sources: KFF Health System Tracker - small group market premium analysis - Word & Brown: small business insurance premiums 2026 - IRS: Health Savings Accounts and High-Deductible Health Plans - Healthcare.gov: Small Business Health Options Program (SHOP)
Dr. Renee Carter covers healthcare and benefits issues for small businesses at The Useful Daily.