Title 42 — The Public Health and WelfareRelease 119-73

§300bb–4 Applicable premium

Title 42 › Chapter CHAPTER 6A— - PUBLIC HEALTH SERVICE › Subchapter SUBCHAPTER XX— - REQUIREMENTS FOR CERTAIN GROUP HEALTH PLANS FOR CERTAIN STATE AND LOCAL EMPLOYEES › § 300bb–4

Last updated Apr 6, 2026|Official source

Summary

Explains how to figure the applicable premium for continuation coverage. Applicable premium is the amount the plan pays to give the same coverage to people in the same situation who did not have a qualifying event, whether the employer or employee normally pays it. Determination period: a 12-month period used to set the premium and chosen before that period begins. If the plan is self-insured, the premium must be either a reasonable actuarial estimate that follows factors the Secretary sets, or, if the plan administrator chooses, the plan’s cost for the same period in the preceding determination period adjusted by the percentage change in the implicit price deflator of the gross national product (calculated by the Department of Commerce and published in the Survey of Current Business) for the 12‑month period ending on the last day of the sixth month of that preceding determination period. The administrator cannot use that prior-period method if coverage or the employees covered changed significantly between the two periods.

Full Legal Text

Title 42, §300bb–4

The Public Health and Welfare — Source: USLM XML via OLRC

For purposes of this subchapter—

(1)The term “applicable premium” means, with respect to any period of continuation coverage of qualified beneficiaries, the cost to the plan for such period of the coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred (without regard to whether such cost is paid by the employer or employee).

(2)To the extent that a plan is a self-insured plan—

(A)Except as provided in subparagraph (B), the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to a reasonable estimate of the cost of providing coverage for such period for similarly situated beneficiaries which—

(i)is determined on an actuarial basis, and

(ii)takes into account such factors as the Secretary may prescribe in regulations.

(B)If a plan administrator elects to have this subparagraph apply, the applicable premium for any period of continuation coverage of qualified beneficiaries shall be equal to—

(i)the cost to the plan for similarly situated beneficiaries for the same period occurring during the preceding determination period under paragraph (3), adjusted by

(ii)the percentage increase or decrease in the implicit price deflator of the gross national product (calculated by the Department of Commerce and published in the Survey of Current Business) for the 12-month period ending on the last day of the sixth month of such preceding determination period.

(C)A plan administrator may not elect to have subparagraph (B) apply in any case in which there is any significant difference, between the determination period and the preceding determination period, in coverage under, or in employees covered by, the plan. The determination under the preceding sentence for any determination period shall be made at the same time as the determination under paragraph (3).

(3)The determination of any applicable premium shall be made for a period of 12 months and shall be made before the beginning of such period.

Reference

Citations & Metadata

Citation

42 U.S.C. § 300bb–4

Title 42 — The Public Health and Welfare

Last Updated

Apr 6, 2026

Release point: 119-73