Before You Finalize Your 2027 Benefits, Look Beyond the Renewal

By this point in the year, many employers are already deep into benefits renewal conversations.

You may have renewal numbers in hand. You may be comparing carriers, deductibles, contributions, or plan designs. You may already be close to a decision.

Before you finalize it, there are a few things worth looking at beyond the renewal percentage.

That matters more this year because employers are facing unusually high cost pressure. Marsh is projecting an average 8.2% increase in total health benefit cost per employee for 2027, even after employers make cost-reduction changes. Employers that made no changes estimated their current plans would rise about 11% on average. Mercer

So the question is not simply, “How do we get the renewal down?”

It is, “What are we actually trying to accomplish with our benefits spend?”

1. Know What You Are Spending Per Employee

Start with the basics.

What does the organization spend annually for:

• employee-only coverage?
• employee plus spouse or child?
• family coverage?
• ancillary benefits?
• employer HSA or HRA contributions?
• other employer-paid benefits?

Then look at those numbers as a percentage of payroll and as a cost per enrolled employee.

The numbers can be larger than many leaders realize.

For context, the average annual employer-sponsored health premium in 2025 was $9,325 for single coverage and $26,993 for family coverage. Workers contributed an average of $6,850 toward family coverage. KFF

That makes benefits one of the larger investments many employers make outside of payroll itself.

Treat it like one.

2. Look at What Employees Actually Experience

A plan can look good on a spreadsheet and still feel unaffordable to employees.

Review more than the employer premium.

Look at:

• employee payroll deductions
• deductibles
• out-of-pocket maximums
• copays
• prescription costs
• dependent coverage costs
• network access

For smaller employers in particular, employee contributions can be significant. In 2025, employees at firms with 10 to 199 workers paid an average of 36% of family premiums, compared with 23% at larger firms. KFF

If you lower the employer renewal increase by shifting significantly more cost to employees, you may have solved one budget problem while creating a recruiting or retention problem.

3. Ask What Employees Are Actually Using

Do not assume every benefit has equal value.

Look at utilization where you can.

Which plans are employees selecting?

Are employees using the benefits you are paying for?

Are there benefits with very low participation?

Are employees choosing the lowest-cost medical plan because they prefer it, or because it is the only one they can afford?

Are there gaps in mental health, pharmacy, family coverage, or other areas that keep showing up in employee questions?

Sometimes the best benefits decision is not adding more.

It is reallocating money toward what employees actually value.

4. Look at Your Workforce, Not Just the Market

A market benchmark is useful, but your workforce is not the market average.

Think about:

• age and life stage
• hourly versus salaried workforce
• geographic location
• turnover
• hard-to-fill roles
• compensation levels
• percentage of employees covering dependents
• recruiting competition

A benefits strategy that works well for one employer may be a poor fit for another employer of the same size.

Your benefits should support the workforce you have and the workforce you are trying to attract.

5. Compare More Than Premiums

When reviewing options, ask what actually changed.

A lower premium can come with:

• a narrower provider network
• a higher deductible
• higher prescription costs
• different specialist access
• greater employee contribution
• increased out-of-pocket exposure

Two plans that look similar in total cost can create very different employee experiences.

If you are changing plans, ask someone to show you the tradeoffs clearly.

Not just what costs less, but who wins, who pays more, and where the risk moved.

6. Understand How Your Adviser Is Paid

This is one that many employers do not think to ask.

Benefits brokers and consultants can be compensated in different ways, including commissions, fees, and other forms of direct or indirect compensation.

For ERISA-covered group health plans, federal law requires covered brokerage and consulting providers to disclose expected compensation to plan fiduciaries. DOL

Ask for the disclosure.

Read it.

You do not have to assume something is wrong because a broker receives commission. Many excellent brokers are compensated that way.

But as the employer making the decision, you should understand the financial relationships around the advice you are receiving.

7. Ask One Question Before the Final Meeting

Before you finalize the plan, ask:

If we were designing our benefits program from scratch for the workforce we have today, would we choose what we have now?

That question can change the conversation.

Maybe the answer is yes.

Maybe your broker has done an excellent job and the current strategy still makes sense.

Or maybe you realize you have been renewing variations of the same program for years without stepping back to look at the whole thing.

That is where an outside employer-side perspective can sometimes help, whether it comes from Finance, HR, a benefits adviser, or another trusted consultant.

The value is not in adding another person to the meeting.

It is in having someone who knows what questions to ask before the decision is final.

Open Enrollment Is the Deadline. Benefits Strategy Is the Bigger Decision.

For 2027, employers are facing significant cost pressure. Many will make plan changes, increase employee contributions, or both. Marsh reports that 59% of employers expect to make cost-cutting changes to their health plans in 2027. Mercer

That makes this a particularly important year to look beyond the renewal percentage.

Understand the cost.

Understand the employee impact.

Understand the tradeoffs.

Understand who is advising you and how they are compensated.

Then make the decision that fits your business and your workforce.

Michelle Attia, MHRM, SPHR, is Founder and Principal Consultant of Axisara Group. Michelle works with organizations on a fractional and project basis across workforce strategy, organizational effectiveness, compensation and benefits strategy, manager capability, HR operations, compliance, and complex people challenges. Through Axisara Group, clients can also access broader support across payroll, benefits, recruiting, training, HR technology, communications, and complementary business services.