42 U.S.C. § 300bb–4 — Applicable premium

(1) In general: "Applicable premium" means, for any period of continuation coverage, the cost the plan pays for that period to cover similarly situated beneficiaries who haven't had a qualifying event — regardless of whether the employer or the employee normally pays that cost. (2) Special rule for self-insured plans: For a self-insured plan: (A) In general — unless (B) applies, the applicable premium must be a reasonable estimate of the cost of covering similarly situated beneficiaries for that period. This estimate must be figured out using actuarial methods and any factors the Secretary sets by regulation. (B) Determination on basis of past cost — if the plan administrator chooses, the applicable premium can instead equal last year's cost for similarly situated beneficiaries for the same period, adjusted by the change in a government price index (the GNP implicit price deflator, from the Department of Commerce) over the 12 months ending on the last day of the sixth month of that prior period. (C) Subparagraph (B) not to apply where significant change — the plan administrator cannot use the past-cost method if there's been a significant change, between the current and prior periods, in what the plan covers or which employees it covers. This determination happens at the same time as the paragraph (3) determination. (3) Determination period: The applicable premium is set for a 12-month period, and must be determined before that period begins.