There are two ways that health insurance carriers determine premiums. The first method is called member-level rating, also known as age-rated, and uses the employee’s personal details to determine the price on an individual basis. The second is called composite rating and determines price using individual information when the plan is established, averages the price for all employees, and locks it in for the duration of the plan year.
Member-Level Rating
Premiums are based on each member’s individual risk level, using there, age, zip code, and in some states, the smoker’s status of the employees and their dependents. For small group insurance, these rates are public, so we can tell you exactly what your premium will be when you enroll.
Composite Rating
Premiums are calculated based on the average of the rates of all of the participating employees. This means that we cannot determine your premium exactly until all employees in your company complete open enrollment and their applications are submitted. At that time, the carrier calculates the final composite rates. Once that’s done, we will tell you what your premiums will be for the year.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.
