Final answer:
The employer-funded insurance benefit plan derived from current revenues is called a self-insured plan. This is different from defined contribution plans like 401(k)s, which are now more prevalent and offer benefits such as portability and inflation protection.
The correct answer is C
Step-by-step explanation:
The plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is known as a self-insured plan. Unlike traditional insurance where a company pays premiums to an insurance provider, a self-insured plan means the employer assumes the financial risk of providing health care benefits to its employees.
In this case, funds are set aside and used to pay for claims as they occur.
Comparatively, defined benefit plans are traditional pension plans where the benefits are calculated using a formula that considers factors such as salary history and duration of employment.
These plans are less common now and have been largely replaced by defined contribution plans such as 401(k)s and 403(b)s, where the employer contributes a fixed amount to the employee's retirement account. These contributions are often matched by the employee, invested, and are tax-deferred.
The benefits of such plans include portability and protection from inflation.
It's also worth noting that employers offering pensions are obliged to insure a fraction of their pension commitments with the Pension Benefit Guarantee Corporation to safeguard at least some pension benefits in case of the company's inability to meet its promised obligations.
The correct answer is C