A situation in which only higher-risk employees choose and use certain benefits under a flexible benefits plan provided by employers is referred to as _____.
A) concentration of risk
B) perceived vulnerability
C) adverse selection
D) skewed distribution effect

Question

Quizplus · Accepted Answer

This situation is referred to as adverse selection, which occurs when only higher-risk individuals choose to use certain benefits, leading to an imbalance in the risk pool and potentially higher costs for the employer.

A Situation in Which Only Higher-Risk Employees Choose and Use