By Which employers does age-banded pricing apply to?
In California, small group rules cover employers up to 100 employees, and rates there are age-banded.
What two things should you confirm before modeling rates?
- Your situs location. It isn't necessarily your headquarters. It's where 50% or more of the people taking benefits are located, and it drives which rates apply.
- Where each employee lives, by zip code. This maps people to networks. Small group plans are increasingly built for 15- or 20-person companies spread across the country, so confirm there's a plan that works in every employee's market. Someone in Hawaii, for example, likely needs a completely different plan from the one you're proposing for everyone else.
What does an age-banded rate table look like?
A rate table lists a monthly rate for each age, for each plan. These are illustrative figures from a real 2026 California renewal, rounded.
| Age | Silver PPO (monthly) | Gold plan (monthly) |
|---|---|---|
| 21 | about $576 | Not shown |
| 40 | about $736 | about $918 |
| 64 and over | about $1,728 | Not shown |
The same silver PPO costs three times as much for a 64-year-old as for a 21-year-old.
How is one household's premium calculated?
Take one employee on the silver PPO, all in the same rating area:
| Household member | Monthly premium |
|---|---|
| Employee, age 40 | about $736 |
| Spouse, age 36 | about $708 |
| Child | about $576 |
| Total household premium | about $2,020 |
Now picture a household with four or five kids. Under age-banded pricing, the number keeps climbing with each person covered. That is very different from the traditional four-tier rates (employee, employee plus spouse, and so on) many people expect, and it's why you need to think this through before you set your benefits budget.
Common questions
What is an age-banded rate?
A monthly premium set by each covered person's age, from a state-approved table. Two people on the same plan can pay very different rates.
What is a situs location?
The location that determines which rates apply to your group: where 50% or more of the people taking benefits are, not necessarily your headquarters.
Why do employee zip codes matter for group health insurance?
They determine rating areas and network access. Someone in a different state or market, like Hawaii, may need a different plan.
Can we negotiate age-banded rates?
No. The table is state-approved. What you can control is plan design and your contribution strategy.
How much more does an older employee cost on the same plan?
In the 2026 California example, a 64-year-old on the silver PPO costs about $1,728 a month versus about $576 for a 21-year-old, roughly three times as much.
Steve Taylor, founder of Thinq HR & Insurance Services, has 15 years in employee benefits, HR, payroll, PEOs and insurance, including time inside Paychex, ADP and TriNet. He runs this analysis for client groups every renewal cycle.