Composite Rates

Insurance companies have two methods for determining premiums: member-level rating and composite rating.

In member-level rating, premiums are assigned based on each member's individual risk level, based on factors such as age and zip code. Composite rating allows insurance companies to assign rates based on the overall risk profile of a whole company.

Most commonly, composite rates will be assigned based on family type: Employee-Only, Employee + Spouse, Employee + Child, and Family. Composite rates are calculated by adding up all the member-level rates for the enrolling employees and recalculating them into averages.

Since final premiums cannot be calculated until the whole group has enrolled, the rates shown during enrollment are estimates. Final rates will be calculated after enrollment, which may result in rate changes and and adjustments for employees, so preparing for that possibility is important. See Composite Rate Quotes and Adjustments for more information.


Composite Rate Calculations

Composite rates are calculated in a unique manner. Instead of assigning each employee a rate based on the individual age and zip code, the carrier takes an average of premiums f... Learn more

Composite Rate Quotes and Adjustments

Composite rates are one way an insurance carrier decides on the premiums for employees at a company at time of enrollment. Composite Rates are calculated twice: Once when the ... Learn more

Mid-Year Hires and Composite Rates

If a company offers plans that use the composite rate premium structure, the premiums that are officially established by the carrier after they have confirmed enrollments will b... Learn more

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