Menu
If you are the controller or an owner of a small business there are major decision you will have to make on an employee health insurance. The one that I will focus on here is age based vs composite premium calculations. These will impact your employees.
Age base premium is exactly what they sound like. The premium is calculated by your age. So the younger employee benefit with this because they pay less in premium. The older employee pays much more.
Composite rates are an average of the employee ages. So every employee pays the same amount.
There are pros and cons to both approaches. Composite is much easier to administer because everyone pays the same price. The age based makes it much cheaper for younger employees which can help with retaining young health people on the plan.
Each case is different but these are things to think about when establishing a plan or renewing a group health plan.
