Which statement best describes run-out protection?

Which statement best describes run-out protection?

• A. Covers claims paid during the plan year.
• B. Covers claims paid after the plan year ends.
• C. Covers only the first year’s claims.
• D. Covers enrollment fees for the next year.

Answer: (B)

Run-out protection is the extension of coverage after the plan year ends that pays for claims incurred during the plan year but paid after the year ends. This tail ensures that services provided while the plan was active get reimbursed even if payment happens later, so late-billed or late-submitted claims aren’t denied just because the policy term ended. For example, a procedure done in December might not be billed and paid until January; run-out protection covers that payment despite the year having ended. It isn’t about claims paid during the plan year, nor about only the first year’s claims, and it doesn’t cover enrollment fees.

Run-out protection is the extension of coverage after the plan year ends that pays for claims incurred during the plan year but paid after the year ends. This tail ensures that services provided while the plan was active get reimbursed even if payment happens later, so late-billed or late-submitted claims aren’t denied just because the policy term ended. For example, a procedure done in December might not be billed and paid until January; run-out protection covers that payment despite the year having ended.

It isn’t about claims paid during the plan year, nor about only the first year’s claims, and it doesn’t cover enrollment fees.