Group health rate sheets and enrollment forms use short codes for who is covered. Knowing what each tier means helps you read a renewal, set employer contributions and answer employee questions. This guide covers the four common tiers and why the structure matters.
The codes are shorthand, and carriers can label them slightly differently, so check the legend on your rate sheet.
The employee covers only themselves. This is the tier used to test whether coverage is affordable under the ACA.
The employee and a spouse are covered, with no children on the plan.
The employee and one or more children are covered, with no spouse on the plan.
The employee, a spouse and children are covered. Some carriers also use a separate employee plus one tier.
| Structure | Tiers Used | Notes |
|---|---|---|
| Two-tier | Employee only; employee plus dependents | Simple to read, less precise on cost |
| Three-tier | Employee only; employee plus one; family | Common for small groups |
| Four-tier | EE; ES; EC; EF | The most common structure on rate sheets |
Renewal increases can differ by tier, and enrollment mix changes the total even when rates hold.
Many employers pay a larger share of the employee tier than of dependent tiers. The dollars per tier decide what employees pay.
Affordability is measured on the lowest cost self-only option that meets minimum value, which is the EE tier.
Total cost depends on how many employees sit in each tier, not only on the rate.
Showing employees their own tier price makes enrollment decisions easier.
A census with the wrong tier for even a few employees changes the quote.
Tier counts are one of the plainest signals in a renewal. If more employees move from employee-only to a family tier, cost rises even if the rates are flat, and the reverse is also true. Tracking the mix from year to year helps you understand why total spending changed and what to expect next.
The tiers also shape how employees see the plan. A family can face a very different cost from a single employee, so employer contributions, communication and any tier-based decisions deserve attention. Check that every enrollee is in the right tier. An employee listed as employee-only with a spouse on the plan, or the reverse, creates billing and eligibility problems.
EE means employee only. Only the employee is covered.
EC covers the employee and children. EF covers the employee, a spouse and children.
It prices the cost of one dependent, whoever that person is, separately from a full family.
The employee only tier, using the lowest priced option that meets minimum value.
Yes. Many employers pay more toward the employee tier than toward dependents. Contribution rules still apply.
Yes. CFH Insurance Consultants can walk through your rate sheet and tiers. Send us the renewal.
Most use some version of four tiers, though some use three or add extra tiers. Check your rate sheet’s legend.
At least at renewal and at open enrollment, and when employees report life events. A comparison of your enrollment records to the carrier invoice is a quick check.
Public Health Service Act section 2701 (42 U.S.C. § 300gg), fair premium rating in the individual and small group markets; Internal Revenue Code section 36B(c)(2)(C), affordability of employer coverage.
The employee-only tier in more detail.
What can be negotiated.
Why the cheapest quote is rarely the cheapest year.
The basics of group coverage.
Rules for groups under fifty.
Getting the data right.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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