In group health insurance, a "composite rate" is a simplified pricing structure where a single average premium amount is charged for every employee, regardless of their individual age, gender, or health risk status. This contrasts with "age-banded" rates, where premiums vary significantly based on the demographic makeup of the workforce.
Insurance carriers calculate the total premium required to cover the risk of the entire group for the year based on census data. To determine the composite rate, this total required premium is divided equally among the total number of enrolled employees. This simplifies administration for HR departments and offers predictable costs for employees, though younger employees effectively subsidize older ones within the pool.
Composite Rate Calculator
Use the calculator below to determine the average monthly and annual composite rate per employee based on the total group premium requirement and the total number of participants.
Note: This calculation assumes a flat composite rate structure. Some plans use tiered composite rates (e.g., Employee Only, Employee + Spouse, Family), which require more complex weighted calculations.
function calculateCompositeRate() {
// Get input values
var totalPremiumInput = document.getElementById("totalAnnualPremium").value;
var totalCountInput = document.getElementById("totalEmployeeCount").value;
// Convert to numbers
var totalPremium = parseFloat(totalPremiumInput);
var totalCount = parseInt(totalCountInput);
// Get result element
var resultElement = document.getElementById("compositeResult");
// Validate inputs
if (isNaN(totalPremium) || totalPremium <= 0 || isNaN(totalCount) || totalCount <= 0) {
resultElement.style.display = "block";
resultElement.innerHTML = "Please enter valid positive numbers for the total premium and employee count.";
return;
}
// Calculate rates
var annualCompositeRate = totalPremium / totalCount;
var monthlyCompositeRate = annualCompositeRate / 12;
// Format results to currency string
var monthlyFormatted = monthlyCompositeRate.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
var annualFormatted = annualCompositeRate.toLocaleString('en-US', { style: 'currency', currency: 'USD' });
// Display results
resultElement.style.display = "block";
resultElement.innerHTML = "