Which outcome would indicate run-out protection is in effect?

Which outcome would indicate run-out protection is in effect?

• A. Covers claims paid during the plan year.
• B. Covers all claims for the next calendar year.
• C. Covers only administrative expenses.
• D. Covers claims paid after the plan year ends.

Answer: (D)

Run-out protection means there’s a grace period after the plan year ends during which claims incurred in that year can still be paid. It ensures pending or unpaid claims aren’t lost when the year closes. So the outcome that shows run-out protection is in effect is that claims are paid after the plan year ends. The other options don’t demonstrate this post-year payment runway: covering claims paid during the year stops at year-end; covering all claims for the next calendar year moves coverage forward instead of addressing claims from the prior year; and covering only administrative expenses doesn’t reflect claims processing after year-end.

Run-out protection means there’s a grace period after the plan year ends during which claims incurred in that year can still be paid. It ensures pending or unpaid claims aren’t lost when the year closes. So the outcome that shows run-out protection is in effect is that claims are paid after the plan year ends. The other options don’t demonstrate this post-year payment runway: covering claims paid during the year stops at year-end; covering all claims for the next calendar year moves coverage forward instead of addressing claims from the prior year; and covering only administrative expenses doesn’t reflect claims processing after year-end.