Small businesses offering ACA-compliant group health plans are looking at a median premium increase of 11% for 2026, according to a new analysis from KFF’s Peterson-KFF Health System Tracker — a steeper jump than earlier forecasts from PwC and other industry analysts, which had pegged the increase closer to 6.5-9%.
What happened
The analysis reviewed preliminary rate filings from 318 small-group insurers across all 50 states and Washington, D.C., with a deeper review of actuarial memoranda from 96 insurers across 16 states to identify what’s actually driving the increases. The median requested increase came in at 11%, with individual insurer requests ranging from a 5% decrease to a 32% increase, and 68% of insurers requesting somewhere between 5% and 15%.
Rising underlying medical costs are the biggest single factor, with insurers estimating a roughly 9% medical trend increase tied to higher hospital, physician, and prescription drug costs. GLP-1 and other specialty drugs came up repeatedly in insurer filings as a specific cost driver, alongside general inflation, labor shortages pushing up provider reimbursement rates, and continued consolidation among healthcare providers. Notably, 23 of the 96 detailed filings reviewed cited tariffs on pharmaceuticals and medical supplies as a contributing factor.
Why it matters
Small-group health plans are already a shrinking, increasingly strained market. KFF’s researchers flag declining enrollment and a “worsening risk pool” — as healthier employers shift toward lower-cost individual coverage or self-insured arrangements, the businesses that remain in fully-insured small-group plans skew toward higher expected costs, which itself pushes rates up further for everyone left in the pool.
For employers, that’s a compounding problem on top of already-elevated healthcare inflation: the businesses most likely to be squeezed out of traditional small-group coverage by rising premiums are often the same ones without the scale to self-insure or negotiate better terms.
What this means for small business owners
An 11% median increase is a real number to plan a 2026 benefits budget around, but the range matters more than the median for any individual business — insurer requests spanned from a 5% cut to a 32% hike, so what shows up on your renewal could look very different from the headline figure depending on your carrier, state, and group’s claims history.
Now is the time to get your renewal numbers early rather than waiting for the effective date, model the cost impact against payroll and overall budget, and have your bookkeeper or CFO advisor run the comparison between staying on a fully-insured small-group plan versus alternatives like level-funded or self-insured arrangements, which more employers are shifting toward as premiums climb. If GLP-1 and specialty drug utilization is a factor in your group’s claims, ask your broker directly how your carrier is pricing that risk — it’s increasingly a line item insurers call out by name.
“The increasing cost, prevalence, and utilization of GLP-1s and other specialty drugs are frequently mentioned” in insurer rate filings as a driver of 2026 premium increases, according to KFF’s Peterson-KFF Health System Tracker analysis.
The bottom line
Small-group health premiums are rising faster than earlier 2026 forecasts suggested, and the drivers — medical inflation, specialty drug costs, a shrinking and higher-risk small-group pool, even tariffs — aren’t one-year blips. Businesses that get ahead of their renewal numbers and actively compare coverage structures will be in a much better position than those who wait for the bill to arrive.
