Connecticut health insurers are asking for another round of double-digit premium increases. Benefits brokers advising small businesses in the state, and in any other ACA marketplace state facing the same cost pressures, will now await the outcome of the September rate decision.
Carriers selling state-regulated individual and small group plans in Connecticut have requested a more than 16 percent average rate increase for individual policies and more than 17 percent for small group plans, according to Connecticut Public Radio. The carriers named in the filings include Anthem, ConnectiCare, and UnitedHealthcare. A public hearing in Hartford on August 26 drew public comment from residents, healthcare workers, and state lawmakers. The Connecticut Insurance Department expects to issue final rulings in early September, and open enrollment for 2027 coverage begins October 23.
The plans under review cover the individual and small group markets only. They exclude large-group and self-insured plans, which are federally regulated and not subject to Connecticut's rate approval process, as well as public programs like Medicaid. For most small businesses in Connecticut, these are the plans their employees depend on.
The carriers attributed the rate requests to rising prescription drug costs, increased demand for medical services, and the expiration of enhanced Affordable Care Act (ACA) subsidies at the end of 2025, according to Connecticut Public Radio.
The subsidy expiration explains what is driving the filings. Enhanced premium tax credits introduced in 2021 had lowered monthly costs for marketplace enrollees and extended eligibility to households earning above 400 percent of the federal poverty level. When those credits lapsed at year-end 2025, carriers adjusted their pricing to account for a smaller and, in many cases, less healthy enrollee pool. That repricing is now showing up in 2027 filings across states.
The national picture provides useful context. Insurers offering ACA plans requested an average premium increase of approximately 15 percent nationally for 2026, the largest in seven years, according to a KFF analysis of filings from more than 100 insurers in 19 states and Washington, D.C. Connecticut's 2027 requests exceed that benchmark.
The state had already approved a 16.8 percent average increase for individual plans in 2026, based on the Connecticut Insurance Department's September 2025 ruling. The 2027 requests are, therefore, not stacked on a stable base.
Prescription drug costs are a discrete driver alongside the subsidy impact. Pharmacy now accounts for 25 percent of total employer healthcare spending nationally and is projected to rise 12 percent in 2026 before plan changes, according to Business Group on Health's 2027 Employer Healthcare Strategy Survey. The scale of pharmacy cost pressure on employer health plans reaches into every segment of the market, including the small group plans Connecticut is reviewing.
For benefits brokers, the small group rate request is the more immediately actionable figure. A more than 17 percent request does not mean every small employer in Connecticut will see that increase. The department typically approves rates below what carriers file, and the approved figure varies by carrier and plan.
Connecticut Insurance Commissioner Josh Hershman said in a statement reported by Connecticut Public Radio that the department's actuarial team "carefully examines the data behind each request, including trends in medical costs, healthcare utilization, and prescription drug spending." The department's 2025 ruling reduced the 2026 individual rate request and said the approved rates would save consumers $125 million compared to what carriers had sought.
A similar reduction is possible for 2027, but the approved rate will still be materially higher than many small employers have budgeted for. The floor of the renewal conversation is substantially higher than it was two years ago.
Large employer health benefit costs are projected to rise 6.5 percent on average in 2026 among employers with 500 or more workers, according to Mercer's 2025 National Survey of Employer-Sponsored Health Plans. Small employers on state-regulated plans are facing a steeper curve. The cost pressures reshaping what brokers need to bring to the renewal table are not easing in any segment of the market.
The September ruling resets the renewal baseline for benefits brokers with small group clients in Connecticut. Clients who have not yet opened a conversation about plan design alternatives, cost-sharing adjustments, or level-funded structures should do so before the final rates arrive. The window between the September ruling and October 23 open enrollment is narrow.
Connecticut's rate review requires the department to find that filed rates are not excessive, inadequate, or unfairly discriminatory. It does not set a rate ceiling. The department has approved double-digit increases in multiple recent years while reducing what carriers originally filed. Attorney General William Tong wrote to Commissioner Hershman before the August hearing urging the department to examine why procedure costs vary across hospitals and to press carriers on how they negotiate hospital reimbursement rates, according to Connecticut Public Radio.
The hospital reimbursement point reflects a structural limitation in most state rate review processes. Reviews assess what carriers paid to hospitals and other providers, not the underlying negotiated rates that determine those costs. That gap is part of why year-over-year increases compound without the review process having direct traction over the underlying drivers.
For small group brokers, the review provides a partial check, rather than a floor. Plan design, alternative funding structures, and direct vendor accountability are the tools available to clients who want to manage costs rather than absorb whatever the state approves.
