2027 Health Premiums Are Jumping 8%: How Employers Can Cut Costs with DPC

If you own a business, healthcare is probably one of your top three expenses and the one you have the least control over. Premiums go up every renewal, your employees still can't get in to see a doctor, and the carrier decides what you pay next year. And 2027 is shaping up to be the worst renewal in a generation.

2027: The Biggest Health Cost Jump Since 2003

The numbers coming out for 2027 are hard to absorb for any business, and hardest for small ones:

• 8.2% average increase per employee. Employers expect total health benefit cost per employee to rise 8.2% in 2027, the largest jump since 2003. That's after they cut benefits or shift costs. Without changes, they projected 11%. [5]
• 8.6% for California small groups. Covered California for Small Business announced a preliminary 8.6% weighted average rate increase for 2027, with one major carrier at 12.1%. [6]
• $28,303 for one family plan. The average employer family premium hit $28,303 in 2026, up 5%. Wages rose 3.7% and inflation 2.7%. [7]
• Small businesses pay more for less. Workers at small firms contribute $9,687 a year toward family coverage, $2,847 more than at large firms, and face average deductibles of $2,624 compared with $1,772. [7]

The drivers aren't going away: rising hospital and provider costs, specialty drugs and GLP-1 weight-loss medications, high-cost cancer therapies, and new California mandates and taxes layered onto premiums. [5][8]

Why This Is Becoming Unmanageable

An 8% annual increase doesn't sound catastrophic in a single year. Compounded, it doubles your healthcare spend in about nine years, while revenue, margins, and wages don't keep pace. Every renewal leaves the same three bad options:

1. Absorb it and watch healthcare eat into margin, raises, and hiring.
2. Pass it on through higher premiums and deductibles, which makes the benefit worth less to the people you're trying to keep. 59% of employers plan cost-cutting plan changes for 2027. [5]
3. Drop coverage and lose the ability to compete for talent.

None of these fixes the underlying problem: you're paying more every year for a system your employees still struggle to use. More Orange County employers are choosing a fourth option, a self-funded (self-insured) health plan paired with direct primary care (DPC). Here's how that works, where the savings come from, and how Upper Echelon Medical fits in.

Self-Funded vs. Fully Insured: Who Keeps the Savings?

With a fully insured plan, you pay a fixed premium to a carrier and the carrier pays the claims. If your team has a healthy year, the carrier keeps the difference.

With a self-funded plan, your company pays covered claims as they happen, from its own funds or a dedicated account. [1] Most employers hire a third-party administrator (TPA) to process claims and buy stop-loss insurance to cap the risk of large individual or total claims. [1][3] Your employees still have a network, deductibles, copays, and prescription benefits. The difference is who funds it.

That difference matters: in a self-funded plan, every dollar of claims you avoid is a dollar your company keeps. That's why DPC and self-funding work so well together. Smaller groups often get to the same place through a level-funded plan, where you pay a fixed monthly amount and get part of the surplus back when claims come in low.

Where DPC Saves Money

Direct primary care is a flat monthly membership. Your employees keep us as their primary care physician, see us as often as they need with no copays, and any additional charges are discussed up front, so there are no surprise bills. It sits alongside your health plan; it does not replace it.

Here's where the savings come from:

• Primary care comes off the claims ledger. Routine visits, follow-ups, chronic disease management, and telemedicine consults are covered by the membership instead of billed visit by visit to your plan.
• Fewer avoidable urgent care and ER visits. Same-day appointments give employees somewhere to go before a minor problem turns into an urgent care bill or an ER claim.
• Labs and medications at cost. Employer members get labs and medications at our cost, often far below what the same items cost when run through a plan.
• Earlier care for chronic conditions. Blood pressure, blood sugar, cholesterol, weight, and sleep are where long-term claims start. A physician with time to manage them is cheaper than the specialist and hospital bills later.
• Less lost work time. A same-day visit or telemedicine call beats a half-day spent waiting at an urgent care.
• Room to redesign your plan. Once primary care is handled through DPC, many employers work with their broker to adjust deductibles or plan design around what employees actually use.

One more point for employers with HSA-eligible plans: starting in 2026, federal law treats qualifying DPC arrangements (up to $150/month for an individual) as compatible with HSAs. Confirm the details for your plan with your benefits adviser or TPA.

What Upper Echelon Medical Offers Employers

• $150 per employee per month, with no minimum headcount
• Unlimited clinic visits and telemedicine consults, with no copays
• Same-day appointments
• Labs and medications at cost
• One free iDXA total-body composition scan per member each year (additional scans $25, compared with $65 for non-members)
• Integrative, root-cause primary care from physicians who have the time to know your team

To make the math concrete: a 20-person team costs $3,000 per month in membership, plus a one-time $500 enrollment fee. The question for your business is whether that's less than what you're paying today in primary care, urgent care, lab, and prescription claims, plus the work hours lost getting care. We'll help you run that comparison with your own numbers.

How to Evaluate It for Your Company

DPC doesn't guarantee a specific return. Your savings depend on your plan, your claims history, and how many employees actually use the benefit. Run the numbers with real data:

1. Pull your claims data. If you're self-funded, your TPA can give you de-identified spend on primary care, urgent care, ER, labs, and generic prescriptions.
2. Compare it to the membership cost. Use your actual headcount at $150 per employee per month.
3. Talk to your broker and TPA. Ask how DPC fits your plan design, stop-loss contract, and HSA setup.
4. Plan the rollout. A benefit only saves money if employees use it. We help with onboarding so your team knows how to book and what's included.
5. Track it. Agree up front on what you'll measure: participation, claims trends, and employee feedback.

Let's Run Your Numbers

If you have employees in Fullerton or anywhere in North Orange County, we'll sit down with you, and your broker if you'd like, and walk through how DPC would work alongside your current plan, what it would cost, and where you're likely to save.

Don't wait for your 2027 renewal notice to find out what you'll be paying. Email info@upperechelonmedical.com or call (657) 212-3212 to schedule a call or an in-person visit to the clinic. No pressure and no obligation. If DPC isn't a fit for your business, we'll tell you.

Sources

[1] U.S. Department of Labor, 2026 Report to Congress on Self-Insured Group Health Plans: beta.dol.gov

[2] U.S. Department of Labor, Understanding Your Fiduciary Responsibilities Under a Group Health Plan: dol.gov

[3] U.S. Department of Labor, Technical Release 2014-01: dol.gov

[4] Upper Echelon Medical, Membership Pricing: upperechelonmedical.com

[5] Mercer (Marsh), Survey: Health benefit costs expected to jump 8.2% in 2027, the biggest increase since 2003 (August 31, 2026): mercer.com

[6] Covered California for Small Business, 2027 rate change announcement (October 13, 2026): coveredca.com

[7] KFF, 2026 Employer Health Benefits Survey (October 22, 2026): kff.org

[8] California Association of Health Plans, Top Cost Drivers of 2027: calhealthplans.org

This article is for general information and isn't legal, tax, or benefits advice. Review plan design, HSA eligibility, and ERISA obligations with your benefits adviser and counsel.