How Is Health Insurance Calculated? 
After January 1 , 2014 individual health and small group -LRB- 2 to 50 employees -RRB- healthinsurance is calculated on a community rated basis . Essentially a rate table is established for each insurance product with a corresponding rate amount for each year of age for a person enrolled . There is a rate for someone at age 25 , and slightly different rate for age 26 and so on for each year of age . For carriers applying the pure age rating approach it is a matter of telling an individual your rate at this age is `` X '' amount of dollars , for someone covering dependents it is a process of adding the rate for the subscriber , their spouse and/or dependent children -LRB- up to a maximum of 3 dependent children -RRB- for their various ages and that it the total rate for the individual plus dependents . Dependent children over age 21 are added to the cost as an adult . This is the individual insurance carriers and most small group carriers are now calculating their rates . As you might guess , for small businesses this can result in employees with the same level of enrollment coverage -LRB- e.g. - Employee Only -RRB- having different rates which is a headache from an accounting and employer contribution calculation perspective . Some small group carriers do the age calculation that I have described earlier , divide the total by the amount of enrollees in each coverage class -LRB- e.g. - Employee Only , Employee + Spouse , Family -RRB- and come up with a composite rate that yields a uniform rate for each level of enrollment . How the insurance carrier has filed their products with your state insurance commission will determine which style of rates you see from different insurance carriers . However , the underlying rate methodology is the same . 