How do I figure out the total premium?
Q: How do I figure out the total premium?
A: This should be displayed on the summary page of the proposal. With so many different dollar figures on the standard group health insurance proposal, finding the numbers that are of most importance to you can be confusing. Group insurance proposals are presented in many different formats but there are some common things to look for. There should be a Plan Grid, or Plan Summary as part of your group proposal. This should provide you with a summary of the different group health plans available from the various insurance companies represented in your quote. Part of the summary will show the basic plan details, such as deductibles, coinsurance percentages, co-payments, out-of-pocket maximums, hospitalization benefits and prescription drug coverage. There should also be a total dollar amount associated with health plan option listed in the summary grid. On most quote presentations, this represents the total premium for all persons included on the group quote, including dependents. This may or may not be the monthly premium cost that the employer will be responsible for. That depends on what percentage of the employee and dependent premium the employer intends on paying.
As a simple example, let’s say the employer plans on paying for 75% of the premium for all employees and their dependents. In Health Plan A shows a total premium of $2,000 on the summary, the cost to the employer will be $1,500. The employees will be responsible for the remaining $500 in premium, or 25% of the total. In most cases, the employer will pay a higher percentage of the employee only premium and a lesser percentage of the premium if that employee wishes to include dependents on their group health coverage. Your group insurance quote should also provide you with a more detailed breakdown of how the rates are calculated, called the Employee Rate Breakdown. In this section, you will be able to see the calculated premium per employee, the premium for their dependents and the total combined premium. The total cost to the employer will be based on the pre-determined employee contribution as well as the dependent contribution.
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