If a company offers a medical and dental care plan that offers benefits to all of the members of each employee's family for a given monthly premium, an employee who is a mother of five children and who has bad teeth who elects that plan would be an illustration of:

Question

Quizplus · Accepted Answer

The mother of five children who has bad teeth is likely to require more medical and dental care than other employees who do not have such needs. This is an example of adverse selection, where individuals with higher risks or needs are more likely to enroll in an insurance plan. This can lead to higher costs for the insurer, which may increase premiums for all employees.

If a Company Offers a Medical and Dental Care Plan