What are the downsides of composite rating?
Composite rates can be higher than age rating for a young workforce, and they can shift at renewal as the group’s makeup changes, so the simplicity comes with less precision.
Composite Rating
Composite rating sets a single premium for each coverage tier, such as employee-only or family, rather than pricing by each member’s age. It simplifies billing, though the group’s actual age mix still drives the underlying cost.
What is composite rating?
Composite rating charges the whole group the same tier rates, for example employee-only, employee+spouse, family, regardless of each person’s age, using a blended average.
Why might a small business prefer composite rating?
Composite rating gives the employer stable, simple tier rates that don’t shift as employees age during the year, which eases payroll and budgeting, and can favor groups with an older workforce.
What’s the difference between age rating and composite rating?
Age (member-level) rating charges a separate premium for each person based on age; composite rating charges the same tier rates for everyone regardless of age, using a blended average.