See how much premiums and out-of-pocket maximums are going up, and what some businesses are now opting for instead of group health insurance.

ACA Marketplace insurers proposing double-digit increases for 2027

Each year, health insurers submit proposed rates to state regulators for the following year. While rates may be adjusted, proposed rates are a good indicator of what businesses need to plan for. This year, the proposed median premium increase is 15%, according to Peterson-KFF Health System Tracker.

In Michigan, proposed 2027 rate increases for Marketplace plans range from 12.5% for Blue Care Network of Michigan to 25.5% for UnitedHealthcare Community Plan. The average increase in Michigan is 14.2%, reports HealthInsurance.org.

Peterson-KFF Health System Tracker cites several factors for the increases. Among them are rising health care costs, inflation, labor costs, increasing severity of claims, GLP-1s and provider consolidation.

Increases in out-of-pocket maximums

Maximum annual limits on out-of-pocket costs paid before a health insurance plan pays 100% are increasing by approximately 13% for 2027. The new limits are $12,000 (up from $10,600) for individuals and $24,000 (up from $21,200) for family coverage.

Fewer insurers to offer Marketplace plans

Eleven insurers have filed notices that they will exit the ACA Marketplace for 2027. However, these exits do not affect Michigan.

More companies shifting away from group health insurance plans to HRAs

At some companies, group health insurance is going the way of the pension, according to Entrepreneur. An increasing number of employers are dropping group health plans and replacing them with Health Reimbursement Arrangements (HRAs). HRAs are employer-funded plans that reimburse employees for medical expenses. Two types of HRAs can be used for health insurance premiums: an Individual Coverage HRA (ICHRA) and a Qualified Small Employer HRA (QSEHRA).

Subsidy qualification income levels increase for 2027

The majority of people purchasing Marketplace plans receive federal subsidies to offset the cost of health insurance premiums. Enrollees with household income up to 400% of the federal poverty level are eligible for subsidies.

As in 2026, the subsidy cliff remains in 2027. This means that if the enrollee’s income goes above the allowed limit, they are not eligible for any health insurance premium subsidies. For example, single filers are only eligible for subsidies if their income is less than $63,480; for a household of four, the limit is $132,000.

HSA contribution limits increase in 2027

People with Health Savings Accounts can make greater contributions in 2027. The contribution limit is $4,500 for single filers and $9,000 for families. In order to make contributions to an HSA, you must be enrolled in a qualified high-deductible health insurance plan. Individuals age 55 and older can contribute an additional $1,000.

Open enrollment starts November 1

Open enrollment for Marketplace plans runs November 1 through January 15. However, if you want coverage to start January 1, you must enroll by December 15. Coverage starts on February 1 for those who enroll between December 16 and January 15.

In summary, business owners and individuals need to prepare financially for higher health insurance premiums, out-of-pocket maximums and HSA contributions in 2027.

 

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