A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called

A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called

• A. A self-funded plan
• B. A fully insured plan
• C. A group policy
• D. A modular plan

Answer: (A)

The key idea is how benefits are funded and who bears the risk. In a self-funded plan, the employer pays benefits from its own current revenues and assumes the financial risk, often with a third-party administrator handling claims. This matches the description of benefits funded from the employer’s revenues. A fully insured plan, by contrast, is funded through premiums paid to an insurance company, with the insurer taking on the risk. A group policy simply refers to coverage for a defined group and doesn’t specify funding source, and a modular plan relates to how benefits are structured rather than who funds them.

The key idea is how benefits are funded and who bears the risk. In a self-funded plan, the employer pays benefits from its own current revenues and assumes the financial risk, often with a third-party administrator handling claims. This matches the description of benefits funded from the employer’s revenues. A fully insured plan, by contrast, is funded through premiums paid to an insurance company, with the insurer taking on the risk. A group policy simply refers to coverage for a defined group and doesn’t specify funding source, and a modular plan relates to how benefits are structured rather than who funds them.