Weighting is a method of combining multiple years of claims experience are to calculate a renewal adjustment for employee benefits. The most recent claims experience is typically given the greatest weighting. Each carrier uses a different methodology for weighting the claims experience. For example, some carriers may weight two years of experience while others may weight three years.
Different lines of benefits may also use different weighting. For example, Short-term Disability may be weighted over a three year period at 70% current period, 20% prior period and 10% prior-two period. Health and Dental may be weighted over two years at 75% current period and 25% prior period.
The size of the group may also impact the weighting; larger groups, i.e., 50+ or 100+ employees may be weighted 100% on the current period.
Weighing is 1 of 7 factors that influence group benefit rate adjustments.