# Health insurance renewal calculator

Source: https://www.getprescience.com/tools/health-insurance-renewal-calculator
Author: Rishab Jain, Cofounder and CEO, Prescience
Published: 2026-10-29
Updated: 2026-10-29
Cite as: Rishab Jain. "Health insurance renewal calculator." Prescience, October 29, 2026. https://www.getprescience.com/tools/health-insurance-renewal-calculator

A renewal letter gives you a percentage. This calculator turns it into dollars: how much more the company will pay next year, and how much more each employee will see taken out of their paycheck if you keep the same split. Employers in Mercer's 2026 survey expect health benefit costs per employee to rise 8.2% in 2027 after planned changes, and about 11% if they change nothing. For a 20-person team at $900 a month each, a 9% renewal is about $19,400 a year.

- **Expected 2027 cost rise (Mercer):** 8.2% after changes, ~11% without
- **PwC 2027 medical cost trend:** 9%
- **Notice before renewal:** Usually 30 to 90 days
- **Best time to shop:** 90 to 120 days before renewal

## Turn your renewal increase into dollars

_Interactive calculator: open the page in a browser to use it. The rules and figures it applies follow._

Use the total monthly premium per enrolled employee: the company's share plus the employee's, divided by the number of enrolled employees. If your renewal quotes separate rates for single and family coverage, the blended average is close enough for a first look. For a tier-by-tier view, use the [employer health insurance cost calculator](https://www.getprescience.com/tools/employer-health-insurance-cost-calculator) with the old and new rates.

## Worked examples

**A 9% renewal for 20 employees**

Illustrative. 20 enrolled employees, an average total premium of $900 per employee per month, a 9% renewal and the company paying 84%.

- Current premium: 20 × $900 × 12 = $216,000
- Renewed premium: $216,000 × 1.09 = $235,440
- Added cost for the year: $19,440
- Company's share (84%): $16,329.60
- Each employee, per month: $900 × 9% × 16% = $12.96

**$19,440 more a year,** most of it paid by the company. Employees see about $13 more a month.

**Three renewals in a row**

Illustrative. The same team renews at 9%, 9% and 9% without changing plans.

- Year 1 premium: $216,000
- Year 2: $235,440
- Year 3: $256,630
- Year 4: $279,726

**Premiums rise about 30% in three years.** A single good year of shopping matters more than it looks, because every later increase compounds on it.

## Why renewals go up

A renewal increase is the carrier's new price for next year, and it usually combines several things. Knowing which ones apply to you tells you how much room you have to negotiate.

- **Medical trend.** Prices for hospitals, doctors and drugs rise every year. PwC projects a 9% group medical cost trend for 2027.
- **Aging.** Small-group premiums are rated by age. A team that's a year older costs more even if nothing else changes.
- **Claims.** Larger groups and level-funded plans are rated partly on their own claims. A few expensive claims can push a small group's renewal well above trend.
- **Specialty drugs.** GLP-1s and other high-cost drugs are a growing share of costs. Mercer attributes about a full percentage point of 2027 cost growth to GLP-1 use alone.
- **Plan changes and taxes.** New state mandates, carrier fees and benefit changes all flow into the rate.

For the full breakdown, see [why did our health insurance renewal go up](https://www.getprescience.com/guides/why-did-our-health-insurance-renewal-go-up).

## What to do with a high renewal

1. **Ask for the renewal early** Small-group renewals often arrive 30 to 60 days before the date. Asking your broker or carrier for it at 90 to 120 days gives you time to shop.
2. **Ask what drove the number** Trend, age, claims and plan changes call for different responses. A claims-driven increase on a level-funded plan, for example, may be worth moving away from.
3. **Get at least two alternative quotes** Compare the same benefits across carriers and funding types. Our guide on [how to compare health insurance quotes](https://www.getprescience.com/guides/how-to-compare-health-insurance-quotes) shows what to line up.
4. **Model plan changes before cutting contributions** Raising the deductible or narrowing the network lowers the premium, but shifts costs to employees who use care. Run the [HDHP vs PPO calculator](https://www.getprescience.com/tools/hdhp-vs-ppo-calculator) to see who wins and who loses.
5. **Decide how to split the increase** Passing it through at the same percentage keeps things simple. Absorbing it signals that benefits matter, and is often cheaper than replacing one employee who leaves.

> **Don't let affordability slip:** If you have 50 or more full-time employees, raising employee contributions can make your cheapest plan unaffordable under the ACA. Check the new contribution in the [ACA affordability calculator](https://www.getprescience.com/tools/aca-affordability-calculator) before you announce it.

> **Prescience Choice: ICHRA for $20 per enrolled employee per month.** Tired of renewal letters? With Choice, the company sets the allowance, so its cost only changes when you decide to change it.
> - **You set a monthly allowance;** each employee picks and owns an individual plan
> - **$20 per enrolled employee per month,** with no setup or platform fee
> - **Works in all 50 states and DC,** so remote and multi-state teams fit
> - **Plan comparison, enrollment help and Crystal,** our assistant for benefits questions
> Best for small teams, teams in several states, and anyone pricing ICHRA. [Get a Choice quote](https://www.getprescience.com/employer/choice)

**Put an actual proposal next to the renewal increase**

Use your current employee census, family tiers and contribution policy. Keep changes in enrollment separate from changes in price when comparing the written alternative.

[Compare my renewal costs](https://www.getprescience.com/quote)

[Prepare the renewal census](https://www.getprescience.com/integrations)

[Download the census CSV template](https://www.getprescience.com/api/employer/census-intake/template)

## Passing the increase on to employees

When the company pays a fixed percentage, employees' contributions rise by the same percentage as the premium. When the company pays a fixed dollar amount, employees absorb the whole increase, which can be a surprise: on a $900 premium with the company paying a flat $750, a 9% renewal raises the employee's share from $150 to $231 a month, a 54% jump.

For most small teams, I'd keep the percentage split and explain the renewal in plain numbers at open enrollment. Our [open enrollment email templates](https://www.getprescience.com/guides/open-enrollment-email-templates) include one for a premium increase.

## How to read your renewal letter

A renewal letter usually has more in it than the headline percentage. Before reacting to the number, check these:

- **Rates by tier or by age.** Small-group plans in most states are priced per person by age. A renewal showing "+9%" may mean +6% in base rates and +3% from everyone being a year older.
- **Plan changes.** Carriers sometimes retire a plan and "map" you to a similar one with a different deductible or network. Compare the summary of benefits, not just the name.
- **Rate guarantee.** Most small-group renewals lock rates for 12 months. Level-funded plans may also show a separate change in fees and stop-loss.
- **Census used.** Renewals are priced on the employees enrolled at the time. If people have joined or left, ask for a re-rate.
- **Deadline.** The date by which you have to accept or make changes, usually a few weeks before the renewal date.

## How your group's size and funding shape the renewal

**What drives renewals by plan type**

| Plan type | Typical group | What sets the renewal |
| --- | --- | --- |
| Fully insured small group (ACA) | 1 to 50 employees (100 in some states) | Carrier's filed rates, ages and location; your claims don't count |
| Fully insured large group | 51+ (or 101+) | Partly your own claims, more so as you grow |
| Level-funded | Often 10 to 100 | Your claims, stop-loss pricing and fees |
| Self-funded | Usually larger | Your claims directly, plus stop-loss |
| PEO plan | Any size | The PEO's pool and its own pricing |

This is why the same 9% can mean different things. On an ACA small-group plan, it's mostly the market and your ages; switching carriers can help, but there's little to negotiate on the same plan. On a level-funded plan, a high renewal often follows a bad claims year, and the next year may look the same. Our guide to [level-funded, self-funded and fully insured plans](https://www.getprescience.com/guides/level-funded-vs-self-funded-vs-fully-insured) explains the trade-offs.

## Questions to ask your broker or carrier

- How much of this increase is age, and how much is the base rate?
- Are we being moved to a different plan, and what changed in it?
- What would the same benefits cost with two other carriers, and with a different funding type?
- Is there a plan with a slightly higher deductible that keeps our network, and what does it save?
- When exactly do you need our decision, and what happens if we miss it?

Write the answers down next to the numbers from this calculator. Having the dollar impact, the reason for the increase and at least one alternative in one place makes the decision, and the conversation with your team, much easier.

## A renewal is a good time to compare

Most of the companies that come to us arrive with a renewal letter in hand. We quote Diamond against the renewal so you can see the difference in the same terms: total premium, company share and employee cost.

> **Prescience Diamond: A company health plan with an effective $0 deductible.** Diamond's price is fixed in your quote, so you can put it side by side with your renewal before the deadline.
> - **An effective $0 deductible** and simple copays shown before a visit
> - **A broad national PPO network,** plus providers we contract with directly
> - **24/7 physician-led care navigation** that books visits and explains costs
> - **Usually 10–20% below comparable fully insured coverage,** fixed in your quote, with no admin fees
> Best for teams of about 15 or more that want one great group plan. [Get a Diamond quote](https://www.getprescience.com/get-started?p=Employer&product=diamond)

## Frequently asked questions

**What is a normal health insurance renewal increase?**

Employers in Mercer's 2026 survey expect health benefit costs per employee to rise 8.2% in 2027 after planned changes, and about 11% if they changed nothing. Individual small-group renewals range much more widely, from flat to over 20%.

**How do I calculate the cost of a renewal increase?**

Multiply the current total monthly premium by 12, then by the increase. The company's added cost is that amount times its share of the premium.

**Can I negotiate a health insurance renewal?**

Small-group rates are filed with the state, so the carrier usually can't discount the same plan. You can change plans, carriers or funding type, which is where most savings come from.

**When should I start shopping before renewal?**

90 to 120 days before the renewal date. That leaves time to compare quotes, collect any census or applications and run open enrollment.

**Why did our renewal go up when nobody was sick?**

Small-group renewals mostly reflect medical trend, the team's age and carrier pricing, not your own claims. Even a healthy group sees the trend increase.

**Should the company absorb the renewal increase?**

It depends on budget. Keeping the same percentage split is common. Absorbing it costs more but protects take-home pay, which matters most for lower-paid employees.

## Sources

- [Mercer (Marsh), Employers expect health benefit costs to jump 8.2% in 2027 (September 2026)](https://www.mercer.com/en-us/about/newsroom/employers-expect-health-benefit-costs-to-jump-in-2027/)
- [PwC, Medical cost trend 2027 (Behind the numbers)](https://www.pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html)
- [KFF, 2025 Employer Health Benefits Survey](https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)
- [CMS, ACA market rating rules (age and geographic rating)](https://www.cms.gov/marketplace/private-health-insurance/market-rating-reforms)
- [CMS, medical loss ratio rules](https://www.cms.gov/marketplace/private-health-insurance/medical-loss-ratio)