A problem with providing flexibility in benefit choice is that it _____.
A) does not cover higher-risk employees
B) increases the risk of adverse selection by employees
C) is typically discriminatory in nature
D) increases attrition rate

Question

Quizplus · Accepted Answer

Providing flexibility in benefit choice can increase the risk of adverse selection by employees, as certain individuals may choose only the benefits that they expect to utilize, leaving the employer with a disproportionate and potentially costly group of individuals who require more expensive benefits.

A Problem with Providing Flexibility in Benefit Choice Is That