Which plan is described as 'with aggregate' in the Alternative Work Comp Plans Scale?

Which plan is described as 'with aggregate' in the Alternative Work Comp Plans Scale?

• A. Guaranteed Cost Plan
• B. Large Deductible Plan with Aggregate.
• C. Self-Insurance
• D. Captive

Answer: (B)

In the Alternative Work Comp Plans Scale, an annual aggregate deductible is a feature that shifts more risk to the insured by requiring them to cover a total amount of losses across all claims in the policy year before the insurer pays beyond that deductible. This setup is described as a Large Deductible Plan with Aggregate, where the insured absorbs a substantial portion of early losses but can gain premium savings if losses stay low. The other plans differ in how losses are shared. A Guaranteed Cost Plan provides coverage with no deductible—the insurer handles losses up to the policy limits from the start. Self-insurance involves funding losses from the employer’s own resources, often with or without stop-loss protection, and is not described by an aggregate deductible in the same way. A Captive is a separate insurance company owned by the insured to insure its risks, which is a different risk-funding structure altogether and not characterized by an aggregate deductible setup.

In the Alternative Work Comp Plans Scale, an annual aggregate deductible is a feature that shifts more risk to the insured by requiring them to cover a total amount of losses across all claims in the policy year before the insurer pays beyond that deductible. This setup is described as a Large Deductible Plan with Aggregate, where the insured absorbs a substantial portion of early losses but can gain premium savings if losses stay low.

The other plans differ in how losses are shared. A Guaranteed Cost Plan provides coverage with no deductible—the insurer handles losses up to the policy limits from the start. Self-insurance involves funding losses from the employer’s own resources, often with or without stop-loss protection, and is not described by an aggregate deductible in the same way. A Captive is a separate insurance company owned by the insured to insure its risks, which is a different risk-funding structure altogether and not characterized by an aggregate deductible setup.