Example data table
| Scenario | Eligible | Enroll % | Enrolled | Tier | Network | Funding | Employer % | Estimated Monthly Premium |
|---|---|---|---|---|---|---|---|---|
| Baseline | 25 | 80% | 20 | Silver | PPO | Fully insured | 70% | 13,950.00 |
| Higher participation | 25 | 95% | 24 | Silver | PPO | Fully insured | 70% | 16,250.00 |
| Cost sharing shift | 25 | 80% | 20 | Bronze | HMO | Level-funded | 70% | 11,200.00 |
Formula used
TobaccoLoad = Discounted × (TobaccoUsers% × TobaccoSurcharge%)
TaxAdd = (Discounted + TobaccoLoad) × TaxLoad%
TotalMonthly = Discounted + TobaccoLoad + TaxAdd + (Enrolled×AdminFee) + (BrokerFee%×(Discounted+TobaccoLoad+TaxAdd)) + StopLossAdd
- Enrollment is calculated from eligible employees × participation rate.
- Coverage tier mix must total 100%; it weights the average cost per enrollment.
- Annual projection applies the trend factor to the 12-month total.
How to use this calculator
- Set eligible employees and expected participation rate.
- Enter the coverage tier mix and dependents estimate.
- Choose plan design, network, and funding type.
- Adjust factors, discounts, surcharges, and fees.
- Press Calculate to see results above.
Enrollment volume and unit pricing
The estimate starts by converting eligible employees into enrolled employees using participation rate. Example: 25 eligible × 80% ≈ 20 enrolled. Base unit rate is driven by plan tier (Bronze to Platinum), then scaled by network and funding adjustments. This structure lets you test how enrollment shifts change total premium and per‑enrolled cost.
Coverage tier mix and dependent influence
Tier mix applies a weighted multiplier that reflects employee-only versus family selections. The model uses 1.00 (employee-only), 1.90 (employee+spouse), 1.65 (employee+children), and 2.75 (family). If family elections rise from 10% to 20%, the weighted tier multiplier increases materially, lifting premium even if headcount stays flat. Dependents per enrolled employee also adds utilization pressure through a bounded dependent factor.
Plan design levers with visible tradeoffs
Deductible, out-of-pocket maximum, coinsurance, and PCP copay create a design adjustment. Raising deductible from 1,000 to 3,000 generally lowers modeled premium, while lowering coinsurance from 20% to 10% increases it. A lower PCP copay can also increase premium because first‑dollar coverage raises expected visits. Use the deductible sensitivity chart to compare tradeoffs quickly and document the assumption set.
Risk, geography, and experience loads
Region, industry, and claims history factors multiply to approximate rating behavior. A 1.20 region factor and 1.15 industry factor produces 1.38 before claims. If claims factor is 1.15, combined load becomes about 1.58. This is why reducing high‑cost claim volatility, improving care navigation, and managing chronic conditions can influence renewal direction.
Fees, surcharges, and forecasting
After wellness and reinsurance credits, the model adds tobacco load, taxes, admin fees per enrolled employee, broker percentage, and optional stop-loss. Tobacco load is calculated as Discounted × (Tobacco% × Surcharge%), so 8% tobacco and 12% surcharge adds roughly 0.96% to discounted premium. The breakdown chart shows each component monthly. Annual projection applies the trend factor to the 12‑month total to support next‑year budgeting and scenario comparisons.
FAQs
1) Is this an exact premium quote?
No. It provides a directional estimate using configurable factors. Final premiums depend on carrier underwriting, plan filings, census details, and local rules, plus negotiated network pricing and your group’s actual claims experience.
2) What does participation rate affect?
It sets enrolled employee count used for premium scaling and per‑enrolled fees. Higher participation usually raises total premium, but it can improve pooling and stabilize rates when a broader share of employees enroll.
3) Why must tier mix equal 100%?
The tier mix is treated as a distribution of coverage selections. If it does not total 100%, the weighted tier multiplier becomes inconsistent, which can overstate or understate the average premium per enrolled employee.
4) How should I choose the claims factor?
Use 1.00 for typical experience. Select lower values for favorable, stable claims and higher values for volatility or known large claimants. Keep the same factor across scenarios so comparisons stay meaningful.
5) When should stop‑loss be included?
Stop‑loss is most common in self‑funded or level‑funded programs. Add it when modeling protection against high claims, especially for smaller groups where a single catastrophic claim can materially change annual cost.
6) What does the trend projection represent?
It applies an annual percentage increase to the current monthly estimate to approximate next‑year budgeting. It is not a guarantee, but it helps compare plan and contribution strategies under a consistent inflation assumption.