If adverse selection occurs for one or more benefits in a flexible benefits plan,the higher cost will likely lead to those benefits being dropped from the plan.

Question

Quizplus · Accepted Answer

Adverse selection occurs when individuals with higher risk or greater need for certain benefits opt for those benefits in a flexible benefits plan. This leads to an increase in the cost of those benefits, which may not be sustainable for the plan. As a result, the plan may drop those benefits to control costs and maintain the financial viability of the plan.

If Adverse Selection Occurs for One or More Benefits in a Flexible