Run-out protection is designed to cover which of the following?

Run-out protection is designed to cover which of the following?

• A. Covers claims paid during the plan year.
• B. Covers administrative costs for the plan year.
• C. Covers claims paid after the plan year ends.
• D. Covers all future claims.

Answer: (C)

Run-out protection is about the timing boundary at year-end. It ensures that claims incurred during the plan year can still be paid even after the year ends, as long as they are submitted and processed within the defined run-out period. So, it covers claims paid after the plan year ends. This doesn’t apply to claims that occur after the year ends or to administrative costs, and it isn’t about covering all future claims beyond the run-out window.

Run-out protection is about the timing boundary at year-end. It ensures that claims incurred during the plan year can still be paid even after the year ends, as long as they are submitted and processed within the defined run-out period. So, it covers claims paid after the plan year ends. This doesn’t apply to claims that occur after the year ends or to administrative costs, and it isn’t about covering all future claims beyond the run-out window.