#$2$ General Instructions:

$-$An individual in an Employee Benefits class is asked to answer the following questions regarding the provided case scenarios below and the readings read so far from Chapter $1$ through Chapter $8.$ Textbook: Employee Benefits by Joseph Martocchio $7$th edition.

Scenario#$1$: A corporation with $105$ workers has an individual as its CFO. The claims report that their benefits broker just supplied to them indicates that their $12-$month claims loss ratio for the most recent year is $130\%.$

$-$ Please respond to the questions below of the scenario provided as completely as practicable, thoroughly and provide an example for each to justify the individual$$s answer.

$1)$What does this number signify, and how does it affect our January renewal that is coming up$?$

Scenario#$2$: An individual oversees the human resources department of a $120-$person corporation. One hundred of these $120$ workers are enrolled in the health plan. Their most recent $12-$month claims loss ratio is $60\%,$ according to a claims report that their benefits broker just forwarded to them. We had a $120\%$ loss ratio the year before. The individual knows what a claims loss ratio is$,$ but the broker made a comment about their health plan in the future that required "self$-$funding."

$-$ Please respond to the questions below of the scenario provided as completely as practicable, thoroughly and provide an example for each to justify the individual$$s answer.

a$)$What is the point of their conversation?

b$)$What does "self$-$funding" mean?

c$)$How does it operate?

d$)$ What are the benefits and drawbacks of self$-$funding for them, and why did the broker probably bring it up$?$