What term describes the portion of the policy funded by member contributions to handle deductibles?

• A. Group retention
• B. Co-insurance
• C. Stop loss
• D. Premium waiver

Answer: (A)

The concept to focus on is how risk is funded within a group plan and, specifically, who covers the deductible costs. Group retention refers to the plan keeping and funding a portion of the risk itself, using contributions from members to handle deductible amounts. In this arrangement, the money contributed by members is used to pay for the deductible portion of claims up to a certain limit, with the insurer covering costs beyond that once the deductible is met. This differs from co-insurance, where costs after the deductible are shared between the member and the insurer according to a set percentage. Stop loss is a separate form of protection that limits the plan’s exposure to very large claims via reinsurance, and premium waiver relates to waiving premiums under certain circumstances. So the member-funded portion to handle deductibles is group retention.