Pick the statement that correctly identifies run-out protection.

Pick the statement that correctly identifies run-out protection.

• A. Covers claims paid during the plan year.
• B. Covers claims paid after the plan year ends.
• C. Covers only the initial plan year claims.
• D. Covers premiums for the policy year.

Answer: (C)

Run-out protection means there’s a window after the plan year ends during which claims that were incurred in the plan year can still be submitted and paid. It protects against timing gaps that can occur when billing spills into a new year, ensuring those services aren’t lost because of the calendar. So, the statement that describes run-out protection is that it covers claims paid after the plan year ends. This reflects the purpose of run-out: processing and paying those year‑end claims even once the year has closed. Why the others don’t fit: coverage that happens entirely within the plan year isn’t run-out protection, and protections that relate to premiums aren’t about claim payments. The idea that run-out applies only to the initial year would misstate the concept since run-out concerns post-year processing of claims from the year in question, not a one-time restriction to the first year.

Run-out protection means there’s a window after the plan year ends during which claims that were incurred in the plan year can still be submitted and paid. It protects against timing gaps that can occur when billing spills into a new year, ensuring those services aren’t lost because of the calendar.

So, the statement that describes run-out protection is that it covers claims paid after the plan year ends. This reflects the purpose of run-out: processing and paying those year‑end claims even once the year has closed.

Why the others don’t fit: coverage that happens entirely within the plan year isn’t run-out protection, and protections that relate to premiums aren’t about claim payments. The idea that run-out applies only to the initial year would misstate the concept since run-out concerns post-year processing of claims from the year in question, not a one-time restriction to the first year.