2027 ICHRA Renewals: A Checklist for Reviewing Final Premiums

Final 2027 premiums give benefits consultants a timely test of whether a client’s ICHRA contribution strategy still fits its budget and workforce. The review can reveal where employee costs may differ from projections, whether affordability calculations need attention and which groups may need more enrollment support.

For renewals and new implementations, the practical question is simple: do the final numbers still support the client’s goals? A useful answer requires more than comparing one average premium with another. Consultants need current employee information, relevant local plan costs, the employer’s planned allowances and, where applicable, the affordability method the employer intends to use.

Individual Coverage Health Reimbursement Arrangements, or ICHRAs, are now also known as CHOICE Arrangements. They let an employer provide an allowance that eligible employees can use toward individual coverage. Employees choose among eligible plans available to them, so the effect of a premium change depends on each employee’s age, location, plan choice and allowance.

Cost pressures affect several coverage markets

National figures offer context for renewal discussions, but they don’t settle what any particular client or employee will pay. KFF’s nationwide analysis found a median proposed individual-market premium increase of 15% for 2027, down from the 18% proposed for 2026. Those are insurers’ requested changes, not final approved increases. Requests also differed among carriers, making local and plan-specific comparisons more useful than a national median alone.

Small-group coverage faces similar pressure. KFF found a median proposed increase of 14% among small-group insurers for 2027. Rising medical prices, prescription drug costs and utilization are among the factors contributing to increases in both the individual and small-group markets.

Larger employer plans also face higher projected costs. WTW’s September survey put 2027 employer healthcare cost growth at 11.1% before plan changes. That measure and individual-market premium increases are calculated differently, so they aren’t direct comparisons. Together, though, they point to affordability questions across employer coverage.

For an ICHRA client, the central task is to translate those broader pressures into the coverage choices and costs employees will encounter. Employees can reassess their plan and carrier during Open Enrollment. If a current plan’s premium rises substantially, they may explore other eligible individual plans in their area and apply the employer allowance to the coverage they select. A comparison can include premiums, benefits, provider networks and prescription coverage.

Why the final numbers can differ from early projections

Insurers submit proposed rates before the coverage year, and the requests are reviewed before final rates are set. A carrier may revise a request as it receives more information. The final approved increase can therefore be below, above or close to the initial proposal.

For 2027 coverage, final rate information is scheduled for public posting by October 30, 2026, ahead of Open Enrollment beginning November 1. Some states may publish earlier, so consultants may receive final figures at different points in their planning cycle. A model built from preliminary filings or an assumed increase should be checked again when the applicable premiums are available.

State examples show why a client-level review matters. New York approved an average individual-market increase of 6.0% after insurers requested 20.6%. Connecticut approved 11.3% against a requested 16.2%. Oregon approved a 21.6% increase, above the initial request of 17.5%, while Washington approved 22.2%, close to the 22.4% requested.

Those state averages don’t predict the premium for a particular employee. Individual results depend on the carrier, plan, age and location. Consultants should use the figures as evidence that the gap between a proposal and an approved rate can be material, then update the employee-level analysis with the actual options available in each rating area.

Carrier participation can also change the choice set. For 2027, Ambetter is leaving Delaware’s ACA market. Medica is leaving the individual marketplace in Iowa, Oklahoma and the Kansas City area of Kansas, affecting about 13,000 enrollees. When a carrier exits, identify employees who may need to select another plan and provide time and guidance for reviewing the remaining options.

Review four parts of the contribution strategy

Affordability

Applicable large employers, or ALEs, need to assess ICHRA affordability as part of evaluating their responsibilities under the ACA employer mandate. Smaller employers aren’t subject to that mandate, but affordability can still affect whether employees qualify for premium tax credits.

The general affordability assessment uses the lowest-cost silver premium for self-only coverage available to an employee, based on the employee’s age and home rating area, unless an applicable safe harbor is used. If the benchmark premium is higher than the projection, the planned allowance may need to increase to meet the affordability standard. If it’s lower, the planned allowance may already be sufficient. The calculation should use the affordability percentage and employee information that apply to the new plan year.

For calendar-year 2027 ICHRAs, an ALE may use January 2026 lowest-cost silver premiums under the look-back-month safe harbor, subject to the safe harbor’s requirements. The calculation still uses the applicable employee age and location for 2027, the planned allowance and the 2027 affordability percentage of 10.22%. This method can support earlier contribution planning, before 2027 premiums are available.

When the safe harbor is properly applied, publication of new premiums doesn’t require an employer to replace the 2026 benchmark with the 2027 premium benchmark. The employer should confirm that the allowance meets the standard using the applicable employee information, record the safe harbor used and apply it consistently as required. Employer mandate affordability and an employee’s eligibility for premium tax credits are separate assessments.

Even when the employer meets the affordability standard, final premiums help show what employees may experience. Compare actual 2027 premiums with planned allowances across locations, ages and employee classes. That can identify where employees are likely to pay more than expected and where an adjustment or added enrollment guidance may better support the workforce.

Employee costs

Final rates show how expected employee premium contributions compare with the original model. An ICHRA’s affordability status doesn’t determine every employee’s actual premium cost: that depends on the plan the employee selects and the allowance available to them.

If updated projections show a larger employee contribution than anticipated, give HR clear information to share before enrollment. Employees should understand how their allowance applies to coverage and where to get help comparing costs and plan features. Licensed advisors can help explain available choices, including provider networks and prescription coverage.

Employer budget

An ICHRA allows an employer to set its contribution budget. Higher individual premiums don’t automatically increase the allowance the employer has committed to provide. Final rates help the client decide whether the planned amount still supports its affordability and coverage goals, and whether a change merits consideration.

Keep the maximum allowance budget distinct from projected contributions. The maximum reflects the employer’s potential commitment under the arrangement; actual contributions depend on enrollment and eligible expenses. Clear accounting for both gives HR and finance leaders a more useful picture of the strategy’s cost.

Differences by age and location

Premiums and the reach of an allowance can vary among employees of different ages and in different places. For a workforce spread across states or metro areas, compare updated employee costs with the original projections by location and age, while accounting for any differences in allowances. This helps identify where the strategy remains aligned with the client’s goals and where specific employees or groups may need more support.

A six-step review for renewals and implementations

1. Update the model with final premiums

• Use final approved premiums for the relevant rating areas to refresh employee cost projections. For employer mandate affordability calculations, apply the relevant premium benchmark and the documented safe-harbor method.
• Check that the employee census is current, including home ZIP codes, ages and dependent coverage status. Include primary work locations when using the location safe harbor.
• For plan years beginning in 2027, use the required contribution percentage of 10.22% when assessing affordability.

2. Compare updated results with the original projections

• Compare the original and revised figures at the employer, employee-class and location levels.
• Calculate changes in the maximum allowance budget, projected contributions and employee net premium costs.
• Trace each difference to its likely source: premiums, census information, allowance changes or a combination of factors.
• Flag results that call for a discussion about planned allowances or employee costs.

3. Find employees who may need additional help

• Compare projected net premium costs with original estimates to identify employees facing the largest changes.
• Review rating areas where final premiums diverge substantially from the assumptions used in the initial model.
• Look at results by age and location, including any differences in allowances.
• Check for carrier exits or new market entrants that change available options, then identify employees who may need help choosing another plan.

4. Confirm affordability for applicable large employers

• Assess each employee using the applicable premium benchmark and the employer’s documented safe-harbor method.
• Identify where planned allowances may need adjustment to meet the affordability standard.
• Explain possible employer mandate implications and help the client consider appropriate next steps.
• Document the results and safe harbors used. Separately review final premiums to understand employees’ expected coverage costs.

5. Check the strategy against the employer’s goals

Return to the objectives that shaped the arrangement, such as cost control, recruiting, retention or ACA compliance. Assess whether the planned allowances still support those objectives at final rates. If results vary by employee class or location, consider whether targeted changes would better fit the workforce.

The review should end with a clear recommendation: maintain the current strategy or consider targeted refinements. Before changing allowances, employee classes or other plan terms, check applicable requirements and implementation timing.

6. Prepare communications for leadership and employees

Give HR and finance leaders a concise account of the allowance budget, projected contributions and employee premium costs. Include affordability results where they apply and explain the next steps. Make clear what is known from final rates and which costs depend on individual plan selection.

Confirm that required notices were provided within applicable deadlines. If the review leads to changes in allowances or other plan terms, determine whether plan amendments, updated notices or employee communications are required before implementation. Employee-facing materials should explain how the allowance applies to coverage and what employees can do if their selected plan costs more than expected. Include clear instructions for reaching the support team and licensed advisors with enrollment and plan-selection questions.

What renewing groups can learn from the current year

Clients already using an ICHRA have enrollment and allowance-use experience to bring into the next plan year. Combine those lessons with final premiums to understand how the contribution strategy is working for both the employer and its employees.

• Use current enrollment to anticipate questions. Consider how final premiums and next year’s allowances may affect employees in their current plans. Help HR prepare to explain cost changes and direct employees to support when they explore other coverage options.
• Review employee feedback. Look for recurring questions about choosing coverage, understanding allowances and navigating enrollment. Those patterns can show where communications or support need improvement for the upcoming renewal.
• Compare contributions with available allowances. Review employer contributions toward eligible premiums and expenses alongside the allowances employees could use. Understand why any amounts went unused and apply that information to next year’s spending projections.
• Account for workforce changes. Hiring, location, role or job-status changes may warrant a closer look at the existing class structure and allowances. Check applicable requirements before recommending a change.

Bring the findings back to the client’s original goals. Enrollment experience and final rates together can show what is working, where refinements may help and what guidance employees may need next.

What newly committed groups need before launch

For a client preparing for its first ICHRA plan year, final rates connect the original projections with implementation plans and employee guidance. Review the updated outcomes against the client’s budget, affordability and benefit goals, then walk HR and leadership through any material differences and possible refinements.

Check notice timing and implementation documents early. Employers generally must provide an ICHRA notice at least 90 calendar days before the plan year begins. Employees who become eligible later, including eligible new hires, generally must receive notice by their eligibility date. The same timing applies to employers established less than 120 days before their first ICHRA plan year.

Compare any proposed changes with notices already distributed and plan documents already prepared. Confirm whether updates or additional employee communications are required before implementation. HR and leadership should also be ready to explain how employees choose individual coverage and use the allowance, with access to support for comparing plans, checking provider networks and understanding how the allowance applies to premiums.

When the review points to another discussion

Some findings deserve a closer conversation with the client. These include an applicable large employer whose planned allowances don’t meet the affordability standard for one or more employees under its chosen method; employees facing substantially higher premium contributions than projected; or a carrier exit that leaves a rating area with fewer choices.

A review may also show that the updated figures no longer support the client’s original goals, such as affordability, recruiting or retention in a particular market. Depending on the circumstances, useful next steps may include a closer look at local plan options, a contribution adjustment or more employee guidance. The aim is to give the client a documented view of the numbers and a practical path for supporting employees through their coverage choices.

Final premiums are a checkpoint, not a forecast of every employee’s eventual cost. Update the analysis with current rates and census data, separate affordability calculations from employee cost estimates, and report results by the groups and locations that matter to the client. That process gives renewing and newly committed groups a clearer basis for deciding whether their contribution strategy still fits.