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The purest form of a self-funded benefit plan is one in which the employer pays benefits from current revenue, administers all aspects of the plan, and bears the risk that actual benefit payments will exceed the expected amount of payments. A decision to use this kind of self-funding is generally considered most desirable when certain conditions are present.
These conditions most likely include that the benefit plan:
A health plan's costs can be classified as committed costs or discretionary costs. An example of a discretionary cost for a health plan is the cost of its:
The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:
Current assets.....$5,000,000 -
Total assets.....$6,000,000 -
Current liabilities.....$2,500,000
Total liabilities.....$3,600,000
Stockholders' equity.....$2,400,000
Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.
For the previous financial period, Fairway's net profit margin was:
In order to determine a health plan's quick liquidity ratio, a financial analyst would divide the health plan's:
The following statements are about 501(c)(9) trusts. Select the answer choice containing the correct statement:
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