Experience rating systems for pricing insurance discourage firms from spending money to try to improve their employees' health.

Question

Quizplus · Accepted Answer

Experience rating systems for insurance pricing adjust premiums based on the claim history of a firm. If a firm invests in improving their employees' health, it can lead to fewer claims, which in turn can lower their insurance premiums. This creates an incentive for firms to invest in health improvement initiatives.

Experience Rating Systems for Pricing Insurance Discourage Firms from Spending