HWMay08 Impact Of Benefit Rush

Question 1

1. Describe Benefit Rush
2. Its impact on self-insured
3. Its impact on insured customers

Answer 1

1. BR may occur anytime there is a change in benefits
   
   1. 1 impacts year before change, but also for 2 yes after
2. Large, self-insured customers
   
   2. 1 Demonstrate savings of benefit change by breaking savings into component parts
   3. 2 trend guarantees to self-insured customers
      
      2. 2.1 The fact that carrier may not know about anticipated changes adds risk
3. Insured Business
   
   3. 1 Financial impact can be large
   4. 2 For experience-rated cases, reflect BR into prem calculation
   5. 3 IBNR can be inadequate unless BR taken into account