Premiums

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A health insurance premium is the total amount that must be paid in advance in order obtain coverage for a particular level of services. Usually health insurance premiums are billed and paid on a monthly basis.

Employers typically require employees to share the cost of the plan premium, usually through employee contributions right from their paychecks. Keep in mind, however, that most insurers require the employer to cover at least half of the premium cost for employees.

Employers are free to require employees to cover some or all of the premium cost for dependents, such as a spouse or children.

In addition to sometimes paying a portion of the premium, employees must often pay a certain amount at the time of service, either a copayment or co-insurance. This is known as cost-sharing. In general, the higher the cost-sharing at the time of service, the lower the monthly premium.