Health insurance premium

A health insurance premium is the cost of health insurance that appears on your monthly invoice.  Each employee enrolled in your group plan will have his/her own premium.  Remember to pay your premium to the carrier before it's due to avoid cancellation of coverage.

Questions and Answers

Q: How are the premiums determined?
A: Premium rates can be calculated by age and by region.  

There are three types of age bands:

  • Child age bands: There is a single band for kids and teenagers ages 0 to 20. This means that everyone in this groups is charged the same rate.
  • Adult age bands: There are one-year age bands for people ages 21 through 63. All adults within the same one-year band are charged the same rate, however, premiums can only rise up to a ratio of 3:1 with older age groups. That means that a 64-year-old is not allowed to pay more than three times what a 21-year-old pays.
  • Older adult age bands: There is a single age band for people who are 64 and older. Everyone in this older age band pays the same rate.

States are allowed to institute rating areas by county, zip code, and population density (urban vs. rural). Rating areas in the small group market are determined by the group policyholder's principal business address. In the individual market, they are determined by the primary policyholder's address. Everyone in the same rating area is charged the same premium rate.

Q: Can I be charged more for being a smoker?
A: Yes, insurance carriers can charge 50% more for a plan that covers smokers.

Q: How do I pay my premium?
A:  You must pay your premium before it's due date directly to your carrier.  Your invoice will have instructions explaining how to remit payment.  You may learn more from our help center article on paying your monthly invoice.


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