Last reviewed June 2026

Can an employer base its premium contribution on employees’ ages?

Short answer: Employers set one contribution strategy, a percentage of premium or a flat dollar amount; applied consistently. Because age-rated premiums already rise with age, a percentage contribution naturally pays more for older employees.

Employers generally can’t single out employees by age for different contributions, but the contribution method affects the outcome. A percentage-of-premium contribution automatically pays more in real dollars for older employees (whose age-rated premiums are higher), while a flat-dollar contribution gives everyone the same amount. Whichever is chosen, apply it uniformly within each class of employees to avoid discrimination concerns.

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