Title 29 — LaborRelease 119-73not60

§1164 Applicable Premium

Title 29 › Chapter 18— EMPLOYEE RETIREMENT INCOME SECURITY PROGRAM › Subchapter I— PROTECTION OF EMPLOYEE BENEFIT RIGHTS › Subtitle Subtitle B— Regulatory Provisions › Part 6— continuation coverage and additional standards for group health plans › § 1164

Last updated Apr 5, 2026|Official source

Summary

Tells how to calculate the "applicable premium" for continuation coverage. The applicable premium is the plan’s cost to cover people like the qualified beneficiaries who did not have the qualifying event, even if the employer or employee actually pays the money. For self-insured plans, the premium must usually be a reasonable estimate based on actuarial (insurance math) methods and must follow factors the Secretary sets in rules. An administrator can instead use the prior determination period’s cost adjusted by the change in the gross national product implicit price deflator for the 12-month period that ends on the last day of the sixth month of that preceding determination period. The administrator cannot use that option if coverage or the employee mix changed significantly between periods. The premium is set for a 12-month period and must be fixed before that period starts.

Full Legal Text

Title 29, §1164

Labor — Source: USLM XML via OLRC

For purposes of this part—

(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 an 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)An 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

29 U.S.C. § 1164

Title 29 — Labor

Last Updated

Apr 5, 2026

Release point: 119-73not60