The Connecticut Insurance Department has finalized 2027 rate decisions for fully insured individual and small group health plans, approving an average 11.3% increase in the individual market and 15.1% in the small group market.
Both figures came in below what insurers originally requested, 16.2% for individual plans and 17.8% for small group, reductions the department said cut projected premiums by roughly 30% and 15% respectively from the initial filings. Approximately 220,000 Connecticut residents are enrolled in the fully insured plans subject to the review.
CID evaluated five filings from four insurers, requesting additional supporting documentation and adjusting rates where cost projections weren't adequately justified. The review reduced total premiums by more than $100 million and capped insurer profit margins at less than 1% of premiums. The department also weighed public comments and testimony gathered at an August 26 informational hearing.
Insurance Commissioner Josh Hershman said the reductions don't change the underlying reality facing policyholders.
"There are no winners when health care costs continue to rise at this pace. Even when the Department reduces what insurers request, an increase is still an increase. Families and small businesses that are already stretched by the cost of health coverage continue to feel that pressure," Hershman said.
This is the second straight year Connecticut's individual and small group markets have absorbed increases in the double digits. Insurance Business reported when this year's filings were first submitted in June that carriers cited a specific structural driver behind the jump: the scheduled expiration of enhanced federal premium tax credits first introduced in 2021, which had lowered marketplace costs and extended subsidy eligibility to households earning above 400% of the federal poverty level.
With those credits no longer assumed to continue, and Connecticut's own state-level premium assistance program not expected to offset the gap the way it partially did in 2026, insurers built the anticipated cost impact directly into their 2027 filings.
The approved small group increase is notably steep by national comparison. Mercer's most recent employer survey projects average national employer health benefit costs will rise 8.2% per employee in 2027 even after cost-control measures, meaning Connecticut's approved 15.1% small group increase runs nearly double the national trend, though CID's own figures aren't directly comparable to that survey since Connecticut regulates fully insured small group plans while many larger national employers self-fund coverage under federal rather than state rules.
This year's rate filings came alongside notable structural change in Connecticut's carrier landscape. UnitedHealthcare has absorbed Oxford Health, reducing the number of active small group carriers, while ConnectiCare has dropped its ConnectiCare Inc. division from the individual market entirely, continuing to offer coverage only off-exchange for 2027.
Insurance Business has previously reported that ConnectiCare separately exited the fully insured large group market this year, making it the first major insurer to leave that segment of Connecticut's market, a sign of competitive erosion that predates and compounds this year's rate pressure.
Hershman was explicit that CID's authority has limits.
"Rate review is a vital consumer protection, but it cannot solve rising health care costs on its own. Premiums follow system-wide cost trends, and insurers must negotiate aggressively to manage care effectively and justify every dollar reflected in their rates. We need to move beyond the annual debate over rates and address the underlying drivers of health care costs, which is why the state is advancing the work required under Public Act 26-68 to develop a more affordable and sustainable health coverage model for Connecticut," Hershman said.
For benefits brokers advising Connecticut small employers, the approved 15.1% small group increase is the more immediately actionable figure heading into open enrollment, which begins October 23 through Access Health CT, the state's exchange.
Brokers should expect client conversations this renewal season to center heavily on plan design changes, higher deductibles, narrower networks or increased employee cost-sharing, as employers look for ways to offset an increase running well ahead of the national employer benchmark.
For brokers and consumers navigating the individual market specifically, the loss of ConnectiCare's on-exchange individual option adds a genuine reduction in plan choice on top of the rate increase itself, meaning shoppers comparing plans this enrollment period have fewer carriers to choose from than in recent years.
