This is what you (or your employer) pays to keep your insurance active - think of it like a subscription fee, except for health coverage. Most companies split this cost with their employees, covering anywhere from 50% to 100% depending on the benefit and the company's policy. Some employers pay the full premium for basic coverage but ask employees to contribute if they want to add dependents or upgrade to better plans. The premium stays the same whether you use the insurance once or twenty times that month.
It's quite common for premiums to increase year over year, though not necessarily every single year. Here are the main reasons why:
Medical inflation - Healthcare costs typically rise faster than general inflation. New treatments, better technology, and more expensive medications all push up the cost of care, which insurers pass along through premium increases.
Aging workforce - As your company's employees get older, they generally use more healthcare services and file more claims. Insurers adjust premiums to reflect this increased risk.
Claims experience - If your company had a particularly bad year with lots of expensive claims (major surgeries, chronic conditions, hospitalizations), insurers often raise premiums the following year to cover their losses and anticipated future costs.
Plan changes - Sometimes premiums go up because coverage has been expanded or improved, so you're actually getting more for the increase.