How do I read EE and ER Contribution numbers?
Q: How do I read EE and ER Contribution numbers?
A: Under the Employee Rate Breakdown on a group heath insurance proposal, you may see column headings that read EE Rate, Dep Rate, Total Rate, EE Cont and ER Cont. There are many different formats to a group insurance quote, but these are common abbreviations used by many insurance carriers. The EE Rate is the rate for the employee only that is listed on the same line, usually at the far left column. This would be the rate to insure that employee, whether they choose to include dependents or not. The Dep rate column shows the rate for any dependents, such as a spouse or children, that this employee has requested be included in the group health quote. This is the total health insurance premium for all dependents combined. If it is a “family” rate, that premium will not change, even if the employee elects to add other dependent children to his health plan. The Total Rate column shows the total premium for that employee, including the premium for just the employee, plus the premium for any dependents. If an employee does not have any dependents, the EE Rate will equal the Total Rate, and there will be a $0 under the Dep Rate column.
The EE Contribution column shows the portion of the Total Rate for which the employee is responsible, based on the employee contribution and dependent contribution percentages used to calculate the quotes. Using our previous example, the EE Contribution for Joe Smith will be $350 (25% of the employee only premium of $200 plus 75% of the dependent premium of $400). The ER Contribution column displays the portion of the Total rate for which the employer is responsible for paying. This should be the Total Rate minus the EE Contribution. For Joe Smith, the ER Contribution will be $250 ($600 minus $350). Each of these columns should have a total at the bottom which combines the rates for each employee. The total at the bottom of the ER Contribution column is the total amount that the employer will be responsible for paying toward the entire group health plan. This total can be adjusted by changing the percentage for the employee contribution, the dependent contribution, or both. For the employer, this is usually the most important figure on the group insurance proposal. Analyzing the total employee contribution will allow the company to determine which of the health plans on the quote meet the company budget.
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