Which statement correctly describes when medical-only claims are included on the Annual Report?

Which statement correctly describes when medical-only claims are included on the Annual Report?

• A. They are included for all years.
• B. They are included only for the reporting year.
• C. They are included only if there are probable future medical payments.
• D. They are included never.

Answer: (B)

In this area, what you’re looking at is how the Annual Report captures the plan’s losses for the year. Medical-only claims are those that involve medical treatment but no wage or indemnity benefits. Because the reporting is a yearly snapshot, these medical-only costs are recorded for the year in which the claim is incurred or reported, not carried forward year after year. If a claim does involve future medical costs, those obligations are handled as reserves or actuarial estimates for future periods, not by repeatedly counting the same medical-only claim in every year. So the statement that medical-only claims are included only for the reporting year best reflects how the Annual Report is intended to document the plan’s activity.

In this area, what you’re looking at is how the Annual Report captures the plan’s losses for the year. Medical-only claims are those that involve medical treatment but no wage or indemnity benefits. Because the reporting is a yearly snapshot, these medical-only costs are recorded for the year in which the claim is incurred or reported, not carried forward year after year. If a claim does involve future medical costs, those obligations are handled as reserves or actuarial estimates for future periods, not by repeatedly counting the same medical-only claim in every year. So the statement that medical-only claims are included only for the reporting year best reflects how the Annual Report is intended to document the plan’s activity.