---
kind: "section"
citation: "42 U.S.C. § 300bb–4"
title: "42"
title_heading: "The Public Health and Welfare"
number: "300bb–4"
heading: "Applicable premium"
release: "119-102"
url: "https://uscodex.org/usc/42/300bb-4"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter XX — Requirements for Certain Group Health Plans for Certain State and Local Employees"
---

# §300bb–4. Applicable premium


For purposes of this subchapter—

- (1) **In general—** The term “applicable premium” means, with respect to any period of [continuation coverage](/usc/42/300bb–2.md) of [qualified beneficiaries](/usc/42/300bb–8.md?p=3-A), the cost to the plan for such period of the coverage for similarly situated [beneficiaries](/usc/42/300gg–91.md?p=d-2) with respect to whom a [qualifying event](/usc/42/300bb–3.md) has not occurred (without regard to whether such cost is paid by the [employer](/usc/42/300gg–91.md?p=d-6) or [employee](/usc/42/300gg–91.md?p=d-5)).
- (2) **Special rule for self-insured plans—** To the extent that a plan is a self-insured plan—
  - (A) **In general—** Except as provided in [subparagraph (B)](#2-B), the [applicable premium](#1) for any period of [continuation coverage](/usc/42/300bb–2.md) of [qualified beneficiaries](/usc/42/300bb–8.md?p=3-A) shall be equal to a reasonable estimate of the cost of providing coverage for such period for similarly situated [beneficiaries](/usc/42/300gg–91.md?p=d-2) which—
    - (i) is determined on an actuarial basis, and
    - (ii) takes into account such factors as the [Secretary](/usc/42/201.md?p=c) may prescribe in [regulations](/usc/42/201.md?p=d).
  - (B) **Determination on basis of past cost—** If a [plan administrator](/usc/42/300bb–8.md?p=4) elects to have this subparagraph apply, the [applicable premium](#1) for any period of [continuation coverage](/usc/42/300bb–2.md) of [qualified beneficiaries](/usc/42/300bb–8.md?p=3-A) shall be equal to—
    - (i) the cost to the plan for similarly situated [beneficiaries](/usc/42/300gg–91.md?p=d-2) for the same period occurring during the preceding determination period under [paragraph (3)](#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](/usc/42/6311.md?p=7) 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) **Subparagraph (B) not to apply where significant change—** A [plan administrator](/usc/42/300bb–8.md?p=4) may not elect to have [subparagraph (B)](#2-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](/usc/42/300gg–91.md?p=d-5) 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).
- (3) **Determination period—** The determination of any [applicable premium](#1) shall be made for a period of 12 months and shall be made before the beginning of such period.

## Source credit

(July 1, 1944, ch. 373, title XXII, § 2204, as added Pub. L. 99–272, title X, § 10003(a), Apr. 7, 1986, 100 Stat. 234.)