Open enrollment is arriving in a more expensive health insurance environment than many small employers hoped for. For businesses renewing for the next plan year, the job is not simply to choose a plan and send employees an enrollment link. Employers need to understand what the renewal means for the company budget, decide how much of the increase the business can absorb, show employees what their costs will look like, and make sure benefit elections and payroll deductions are ready when the new plan takes effect.
That matters especially in fall 2026. Pennsylvania has approved an average 10.28% increase for its 2027 small-group market. Delaware approved an 18.0% average increase for Highmark Blue Cross Blue Shield small-group non-Marketplace plans effective January 1, 2027. Nationally, Marsh's preliminary 2026 employer survey found respondents expect health benefit cost per employee to rise 8.2% on average in 2027 even after planned cost-reduction measures. Those figures do not predict any one employer's renewal, but they show why budgeting and employee education deserve attention before open enrollment begins.
For small businesses in Pennsylvania, New Jersey, and Delaware, the most useful open enrollment strategy is to turn the renewal into a practical plan: know the dollars, understand the tradeoffs, communicate clearly, and confirm that the carrier, benefits administration system, and payroll all reflect the same final elections.
The answer in brief: During 2026 open enrollment, small employers should model the real dollar impact of their renewal, review realistic cost-management options, explain premiums and out-of-pocket costs in plain language, confirm when deductibles and other accumulators reset, prepare payroll for new deductions, and reconcile employee elections across the carrier, benefits administration system, and payroll before the new plan takes effect.
Still reviewing the renewal? Start with our companion guide, Your Small Business Health Insurance Renewal Is Here: What Should You Do Next?, for the earlier decision stage before employee enrollment begins.
What Makes Fall 2026 Different for Small Employers?
The current market does not mean every small business will receive the same increase. Rates vary by state, carrier, plan, group characteristics, and renewal date. Still, the broader environment gives employers a reason to budget early rather than wait until employee enrollment is already underway.
10.28% average approved increase for the 2027 ACA small-group market.
18.0% average approved increase for Highmark small-group non-Marketplace plans effective January 1, 2027.
8.2% average increase in employer health benefit cost per employee expected by surveyed employers for 2027 after planned cost-management actions.
Keep the numbers in context. Pennsylvania's figure is a statewide small-group average, Delaware's figure is specific to Highmark's small-group non-Marketplace business, and the Marsh figure comes from a preliminary national survey of more than 1,800 U.S. employers. None of them should be treated as a forecast for a particular employer. New Jersey employers should rely on their own current carrier renewal and available plan options rather than assume a Pennsylvania or Delaware average applies.
Pennsylvania regulators also reported that insurers in the state's individual and small-group markets paid 13% more in medical and prescription-drug claims in 2025 than in 2024. That does not explain every renewal, but it is one sign of the cost pressure behind the current environment.
1. Start With the Real Cost of the Renewal, Not Just the Percentage Increase
A renewal percentage is useful context, but it is not the number a small-business owner actually budgets. The better starting point is the expected dollar impact on the company and on employees.
Model the renewal using the employees and coverage tiers you actually expect to have. Compare the current and renewal cost for employee-only, employee-plus-spouse, employee-plus-child or children, and family coverage. Then apply the contribution approach the company is considering so you can see both the employer cost and the employee payroll deduction.
A 10% renewal increase does not automatically mean every employee deduction rises 10%. The result depends on the coverage tier, the employer contribution formula, workforce changes, and any plan-design changes. Showing the impact in monthly dollars and per-paycheck dollars makes the decision easier to evaluate and much easier to explain later.
| Question to model | What it tells you |
|---|---|
| What is the new annual employer cost? | The actual budget impact of the renewal, not just the rate percentage. |
| What will employees pay by coverage tier? | Where employee affordability pressure may be concentrated. |
| How much of the increase will the company absorb? | Whether the current contribution strategy still fits the budget. |
| What will change per paycheck? | The number employees are most likely to notice and ask about. |
| Has enrollment changed? | Whether headcount or coverage-tier changes are affecting total cost apart from the renewal rate. |
If you are still reviewing the renewal itself, start with HBP's companion guide, Your Small Business Health Insurance Renewal Is Here: What Should You Do Next?. It covers the earlier decision stage before employee enrollment begins.
2. Review Cost-Management Options Before Simply Shifting the Increase to Employees
When a renewal is uncomfortable, employers have more than one possible lever. The goal is not to chase the lowest premium at any cost. It is to understand which options create a workable balance of employer budget, employee cost, coverage, network access, and administration.
Depending on the business and what is available, a review may include another group plan, a different plan design, a different employer contribution approach, multiple plan choices, or an alternative coverage structure such as an ICHRA when appropriate. None of these is automatically better or less expensive for every employer.
The most useful comparison is specific to your workforce. A business with employees concentrated in one area may evaluate options differently from a company with employees spread across several states. A business with limited internal HR support may also place more value on administration and enrollment support than a company with a dedicated benefits team.
Go deeper on cost strategy: Review Employee Benefits Plan Design & Cost Management and Small Business Health Insurance guidance for PA, NJ, and DE.
3. Turn Open Enrollment Into Employee Education, Not Just an Enrollment Task
Employees often focus on the premium deduction first, but that is only one part of what a health plan may cost them. A strong enrollment message helps employees understand the plan in the same terms they will use when they actually receive care.
The U.S. Department of Labor explains that group health plans and issuers subject to the SBC requirements must provide a Summary of Benefits and Coverage, or SBC, at certain times including renewal. The SBC uses a standard format to summarize benefits, cost-sharing provisions, and coverage limitations. Employers can use it as a foundation for education, then add a simpler explanation of what changed and what employees need to do.
| Employee question | What to explain |
|---|---|
| What comes out of my paycheck? | The employee contribution for the selected coverage tier, shown per pay period when possible. |
| What is my deductible? | The amount the employee generally pays for covered services before the plan begins sharing certain costs, subject to the plan rules. |
| What are copays and coinsurance? | How the employee shares the cost of covered services after applicable plan rules are met. |
| What is the out-of-pocket maximum? | The plan-year limit on certain in-network covered cost sharing, subject to the plan terms. |
| Is my doctor or facility in network? | Where employees should verify the current network before choosing a plan. |
| How are prescriptions covered? | Where to review the formulary, tiers, pharmacy network, and plan-specific drug rules. |
Employees do not need a lecture on insurance terminology. They need enough context to compare their choices and understand the practical difference between the amount deducted from their paycheck and the amount they may pay when they use care.
4. Make Deductible Timing Part of the Enrollment Conversation
Deductibles are a common source of confusion during renewal. Employers should not assume every employee's deductible resets on January 1 simply because open enrollment happens in the fall. The reset date and treatment of accumulated amounts depend on the specific plan and plan year.
For a January 1 plan year, fall enrollment is a natural time to remind employees to review where they are in the current plan year and what will reset when the new plan begins. For a business with a different renewal cycle, the timing may be different. Employers should point employees to the plan documents and carrier information rather than make a blanket promise about deductible credit or reset rules.
This is employee education, not medical advice. The goal is to help employees understand their coverage timeline and where to verify plan-specific information before they make enrollment decisions.
5. If You Offer an HSA-Eligible Plan, Update the 2027 Numbers Before Enrollment
If an employer offers an HSA-eligible high-deductible health plan, employees enrolling this fall may need the 2027 limits. The IRS set the 2027 HSA contribution limit at $4,500 for self-only coverage and $9,000 for family coverage. For 2027, an HSA-qualified high-deductible health plan must have a deductible of at least $1,750 for self-only coverage or $3,500 for family coverage, and annual out-of-pocket expenses cannot exceed $8,700 for self-only coverage or $17,400 for family coverage.
These figures matter for enrollment materials and payroll setup, but HSA eligibility depends on more than the plan name. Employers should confirm plan eligibility and applicable tax rules before communicating HSA contribution guidance.
6. Start Looking at Payroll Before Open Enrollment Is Finished
Payroll should not be an afterthought once employees have submitted elections. If contributions or plan choices are changing, the payroll team or payroll provider needs enough time to map the new deductions, confirm effective dates, and test the first payroll that will reflect the new plan year.
For each final election, confirm the employee, coverage tier, employee deduction, effective date, and first affected payroll. If the employer is changing payroll providers around year-end, start the setup early enough to handle data conversion, tax records, and benefit deductions without creating a last-minute project.
HBP's Payroll Services page explains how integrated benefit deductions and benefits data can reduce duplicate entry and help small employers keep payroll and benefits aligned.
Payroll Readiness Checklist
- Confirm the final employee contribution for each plan and coverage tier.
- Translate monthly premiums into the correct payroll frequency.
- Identify the first payroll that should reflect the new deduction.
- Update plan or deduction codes where needed.
- Confirm HSA payroll elections if the employer offers an eligible HSA option.
- Remove deductions that should end and avoid carrying old elections into the new plan year by mistake.
- Test the first affected payroll before processing when the payroll system allows it.
7. Reconcile Benefits Administration, Carrier Records, and Payroll
An employee clicking Submit is not the end of open enrollment. The final step is confirming that the same election appears everywhere it needs to appear.
Benefits administration systems can make it easier for employees to compare plans, enroll online, and keep records organized, but the employer still needs a reconciliation process. This is especially important for small teams where one person may be handling HR, payroll, and benefits alongside other responsibilities.
| Record to verify | What should match |
|---|---|
| Employee election | Correct plan, coverage tier, dependents, and effective date. |
| Carrier enrollment | The carrier shows the same approved election and eligible dependents. |
| Benefits administration system | The employee record, waiver or election, and effective date are complete. |
| Payroll | The deduction amount and first payroll date match the final election. |
| Employer contribution | The amount used for budgeting matches the final plan and enrollment. |
HBP's Benefits Administration service supports online enrollment, year-round record management, and coordination of open enrollment for small businesses.
8. If Your Plan Does Not Renew January 1, Use the Same Process on Your Own Timeline
Not every small business has a January 1 plan year. Employer open enrollment is also not the same thing as the individual Marketplace Open Enrollment Period. Your carrier and plan determine the timing for your group renewal and employee enrollment.
For SHOP coverage, HealthCare.gov says employers can generally enroll year-round and recommends contacting the insurance company or advisor about 45 to 60 days before current coverage ends to review renewal plans and prices. Other group plans may follow different carrier timelines, so the safest approach is to work backward from your own effective date and decision deadline.
The same sequence still applies: understand the renewal, model the budget, make the employer contribution decision, educate employees, collect elections, update payroll, and reconcile the final records.
2026 Open Enrollment Checklist for Small Employers
Before the new plan takes effect, make sure the strategy, employee communication, enrollment records, and payroll all agree.
Final Open Enrollment Check
- Renewal rates and plan changes have been reviewed.
- The employer has modeled the total annual and monthly budget impact.
- Employer contributions are approved for each available plan or coverage tier.
- Employees can see what their cost will be per paycheck.
- Employees received plan materials, including the SBC where applicable.
- Deductible and plan-year timing has been explained accurately for the specific plan.
- 2027 HSA information has been updated if an HSA-eligible plan is offered.
- Enrollment elections, waivers, and dependents have been reviewed.
- Carrier records match the final elections.
- Payroll deductions and effective dates have been checked before the first affected payroll.
- Employees know where to direct plan and enrollment questions.
Frequently Asked Questions About Small Business Open Enrollment
These answers address common questions small employers face while moving from a renewal decision into employee enrollment and implementation.
Is small-business open enrollment the same as Marketplace Open Enrollment?
No. Employer-sponsored group plans follow the renewal and enrollment timing set by the plan and carrier. SHOP coverage can generally be started year-round. The individual and family Marketplace has a separate Open Enrollment Period.
How far in advance should a small business prepare for open enrollment?
Start as soon as the renewal and decision timeline are available. For SHOP coverage, HealthCare.gov recommends contacting the insurer or advisor about 45 to 60 days before current coverage ends because renewal timelines vary. Other carriers and plans may use different deadlines.
How should an employer explain a health insurance increase to employees?
Show the change in practical terms: what the current employee deduction is, what the new deduction will be per paycheck, what the employer is contributing, what plan features changed, when the new rates take effect, and what action the employee needs to take.
When do employee health insurance deductibles reset?
The reset date depends on the specific plan and plan year. Employers should verify the plan documents and carrier information rather than assume every deductible resets January 1.
When should payroll be updated for new benefit elections?
After final elections and contribution amounts are confirmed, but before the first payroll that should reflect the new plan year. The payroll record should match the approved employee election and effective date.
What can a small business do if renewal costs rise more than expected?
Model the real employer and employee dollar impact, compare available group plans and plan designs, review the employer contribution strategy, and consider alternative coverage structures when appropriate. A higher renewal is a reason to review options, not proof that one particular alternative will be better.
What if a small business is offering group health insurance for the first time?
The employer will need to review eligibility, available plan or coverage structures, contribution strategy, enrollment timing, employee communication, and administration. HBP's Small Business Health Insurance guidance for PA, NJ, and DE explains the setup process and available approaches.
Make Open Enrollment a Business Process, Not a Last-Minute Form
Open enrollment works better when the employer treats it as a business process, not a one-time employee form. In 2026, rising costs make the budget conversation more important, but cost is only one part of a successful renewal. Employees also need clear information, payroll needs accurate deductions, and every system needs to reflect the same final enrollment.
Health and Benefits Partners helps small businesses in Pennsylvania, New Jersey, and Delaware review health insurance options, plan for renewal costs, support employee enrollment, coordinate benefits administration, and connect benefits decisions with payroll.
Need Help Making Open Enrollment Easier?
Health and Benefits Partners helps small employers review renewals, compare realistic coverage options, explain benefits to employees, and coordinate enrollment and payroll for the next plan year.
Sources and Helpful Resources
- Pennsylvania Insurance Department Releases Affordable Care Act 2027 Health Insurance Rates
- 2027 Highmark Blue Cross Blue Shield Small Group (Non-Marketplace) Plans
- Employers expect health benefit costs to jump 8.2% in 2027
- Plan Information / Summary of Benefits and Coverage
- Internal Revenue Bulletin 2026-25
- How to Offer SHOP Health Insurance to Your Employees
This article is intended for general educational purposes and does not provide legal, tax, accounting, or medical advice. Market-level statistics are provided for context and are not quotes, guarantees, or predictions of any employer's actual renewal. Insurance rates, plan availability, benefit eligibility, tax treatment, deductible rules, and compliance requirements vary by employer, carrier, plan, location, and individual circumstances. Employers and employees should review the applicable plan documents and consult appropriate professional advisors for their specific situation.
