The formula: Most insurers start by using your group's demographics to arrive at a 'best case' rate that assumes everybody is healthy. Then they add a charge based on the actual health history and age of each member. Premiums vary depending on the plan you pick, but this 'percentage load' usually stays the same.

The state variable: It's hard to generalize about the cost of coverage, because the industry is tightly regulated by the states, and their rules vary widely. Eleven states, mostly in the Northeast, limit or ban rating by medical and claims history and impose so-called community-rated pricing. Most states prescribe the range of premiums: In California, the highest rate is capped at 22 percent above the lowest; in Idaho, it can be 300 percent higher. The District of Columbia, Hawaii, and Pennsylvania have no rate restrictions.

The great divide: The federal law known as HIPAA prohibits discrimination against employees based on health factors; that is, sicker employees can't be made to pay more. On the other hand, employees who are 'similarly situated' in other respects (the same job title, say, or full-time status) can, with some limitations, be grouped into separate health plans or excluded altogether.