Washington Exchange Rates Up 22.2% for 2027: A Level-Funded Alternative for Small Businesses

Information current as of November 2, 2026. Rate figures come from the Washington Office of the Insurance Commissioner’s September 9, 2026 announcement.

If you own a small business in Washington and your team buys its own health insurance on Washington Healthplanfinder, 2027 brings an average 22.2% rate increase. You don’t have to treat that as the only option. If you have employees, a level-funded group plan is one alternative worth pricing before open enrollment closes. It isn’t right for every business, and individuals can’t buy one on their own, but for a qualifying group it prices on a different basis from the individual market.

What Washington approved for 2027 Exchange plans

• Insurers asked for a 22.4% average change. The OIC found 22.2% actuarially justified.
• Twelve insurers will sell individual plans on the Exchange in 2027, down from fourteen in 2026. Providence Health Plan is leaving.
• Insurer averages range from 6.7% at Regence BlueShield to 30.5% at Community Health Plan of Washington.
• The approved rates affect 281,055 people, by the OIC’s count.

The OIC’s actuaries pointed to four drivers: higher prices for care and prescriptions, more use of costlier services, and two that describe who is left in the pool. People leaving the individual market tend to be healthier than those who stay, and the end of the enhanced premium tax credits is pushing more healthy people out. Healthplanfinder enrollment fell 13% in 2026, the largest drop since 2012.

That last point matters for a small business. Your employees’ individual premiums now reflect a statewide pool that is getting smaller and sicker on average. A level-funded group plan is priced on your own group instead.

How a level-funded plan prices differently

A level-funded health plan is a group plan that sits between a traditional fully insured plan and a self-funded one. The business pays a fixed amount each month, and that payment funds three things:

• A claims fund that pays your employees’ medical claims during the year.
• Stop-loss insurance that pays claims above set limits, for one person or for the whole group. In most designs, you don’t owe more than your fixed monthly payments for that plan year.
• Administration, which covers claims processing, the provider network and member service.

Pricing is the key difference. KFF’s 2025 employer survey notes that level-funded plans, unlike insured plans, use health status in rating and underwriting. The carrier prices your group from an employee census and, depending on the carrier, health questionnaires or claims history. A generally healthy group can see strong pricing. A group with recent large claims may be quoted higher than other options, or declined.

If claims come in lower than the claims fund after the plan year closes, some or all of the difference may come back as a refund or renewal credit. That refund is possible, not promised. The share, timing and conditions vary by carrier. Level funding is also common: KFF found 37% of covered workers at firms with 10 to 199 workers were in level-funded plans in 2025. Our level-funded plans page includes a three-minute video that walks through a year, including what happens when a large claim hits.

Who can buy one, and who can’t

Level funding is a group product for employers. A household, or a self-employed person with no employees, can’t switch from Healthplanfinder to a level-funded plan. If that’s you, your 2027 choices are on the individual market, and our 2027 renewal checklist and self-employed budgeting guide are the better starting points.

For businesses with employees, minimum size depends on the carrier and on how many people enroll. Angle Health and Nationwide can quote groups of 2 or more. Cigna needs 25 or more. We also quote UnitedHealthcare. Each carrier sets its own rules on who counts toward its minimum, so tell us exactly who would enroll and we’ll confirm which options your group qualifies for.

The tax-credit check owners often miss

Some of your employees may get premium tax credits or Cascade Care Savings on Healthplanfinder today. Before you offer a group plan, know how it affects them. HealthCare.gov explains that an offer of job-based coverage that is affordable and meets minimum standards generally ends eligibility for Marketplace savings, even if the employee declines your plan.

So the right comparison is household by household, not just your total cost:

1. What does each person pay on Healthplanfinder for 2027 after any tax credit?
2. What would they pay through payroll under the group plan, given your contribution?
3. Are their doctors, hospitals and prescriptions covered under the proposed network?

A group plan that saves the business money but leaves a lower-income employee paying more than they do now isn’t a win. Your contribution strategy can often close that gap, and that’s part of what we model. Employees who move to the group plan should cancel their Healthplanfinder plan once group coverage starts.

Trade-offs to weigh before you switch

• Next year follows this year’s claims. A year with a few large claims can raise your renewal, sometimes by more than a fully insured plan would.
• Underwriting can say no. A group may be priced above its other options, or not offered a plan at all.
• You become the plan sponsor. A level-funded plan is generally a self-funded plan under federal law, so plan documents, notices and privacy rules apply. The carrier or administrator handles most of this.
• Coverage rules differ. Many Washington state benefit mandates don’t apply, and KFF notes these plans aren’t required to provide every essential health benefit that insured plans must. Federal rules, such as ACA preventive care, still apply. Review exactly what the plan covers.
• Leaving takes planning. Claims from before you leave can arrive months later. Ask how those are handled and whether a refund is forfeited if you change plans.

For a fuller side-by-side, read level-funded vs. fully insured health plans in Washington. A fully insured small-group plan is also worth quoting: the OIC approved a 16.7% average increase for 2027 small-group plans, which don’t use your group’s health in pricing.

A 2027 game plan for a small business

1. List who would enroll. Note each person’s current Healthplanfinder premium, any tax credit, and their must-have doctors and prescriptions.
2. Request quotes. We’ll gather a census and route any health questionnaires through each carrier’s secure process.
3. Budget without the refund. Compare twelve months of fixed payments with what your team pays now. Treat any refund as a bonus, not a plan.
4. Keep coverage continuous. If a group plan won’t start January 1, employees still need a 2027 Healthplanfinder plan. Open enrollment runs November 1, 2026 through January 15, 2027, and a plan picked by December 31 starts January 1.

Price a level-funded plan before you accept 22.2%

Washington Insurance Brokers is an independent, licensed agency. We quote level-funded plans from UnitedHealthcare, Nationwide, Angle Health and Cigna, and we put them beside fully insured small-group options and your team’s current Healthplanfinder costs. Call (206) 653-9636 or request a quote for a no-obligation comparison.

Frequently asked questions

Can I buy a level-funded plan just for myself or my family?

No. Level funding is a group plan that an employer sponsors for its employees. Individuals and households buy coverage on the individual market, including Washington Healthplanfinder.

How many employees do we need?

It depends on the carrier. Angle Health and Nationwide can quote groups of 2 or more, and Cigna needs 25 or more. Each carrier decides who counts toward its minimum.

Will we get money back at the end of the year?

Possibly. If claims come in below the claims fund, some or all of the difference may come back as a refund or renewal credit. It isn’t guaranteed, and the terms vary by carrier.

What happens if an employee has a very large claim?

Stop-loss insurance pays claims above the plan’s limits, so in most designs you don’t owe more than your fixed monthly payments that year. A high-claims year can raise next year’s renewal.

Sources

• Washington OIC: Average 22.2% rate increase approved for Washington’s 2027 Exchange health insurance market (September 9, 2026)
• Washington OIC: Nine insurers approved to sell 2027 health insurance plans to small businesses (October 29, 2026)
• KFF: 2025 Employer Health Benefits Survey
• HealthCare.gov: If you have job-based insurance
• Washington Healthplanfinder: Open enrollment vs. special enrollment
• Washington Healthplanfinder: 2027 open enrollment deadlines