In cafeteria-style plans,adverse selection can be controlled by
A)allowing employees to choose benefits based on their personal needs.
B)removing the limitations on coverage amounts.
C)pricing benefits subject to a low adverse selection.
D)increasing the choices that cater to individual needs.
E)using a limited set of packaged options.

Question

Quizplus · Accepted Answer

Using a limited set of packaged options reduces adverse selection by limiting the choices available and making it less likely for individuals to select specific benefits based on their own expected needs or usage. This helps to ensure a more balanced risk pool among plan participants.

In Cafeteria-Style Plans,adverse Selection Can Be Controlled by