Question

Which of the following, if true, best supports the argument that Orion should offer its employees a cafeteria benefits plan?

1) Orion lacks the resources to join a low-cost health insurance plan, so the firm belongs to a pool with other businesses.
2) Some Orion employees have indicated that they would like vision insurance, while others have no interest in dental insurance.
3) Orion offers its employees a PPO health insurance plan, but employees have expressed interest in an HMO plan.
4) Orion outsources its employee benefits program, so employees go through the plan's administrator when filing claims.

Answer 1

Statement 2 best supports the implementation of a cafeteria benefits plan for Orion because it indicates that employees have varying preferences for benefits, which a cafeteria plan can accommodate.

Step-by-step explanation:

The question asks which statement best supports the argument that Orion should offer its employees a cafeteria benefits plan. A cafeteria plan allows employees to choose from a variety of benefits, tailoring their benefits package to their individual needs. Considering the information provided about health maintenance organizations (HMOs), fee-for-service, and adverse selection, the most supportive statement for a cafeteria benefits plan is the one where employees have different insurance needs and preferences. Statement 2 indicates that employees have varying interests in benefits such as vision and dental insurance, which suggests that a one-size-fits-all approach may not be adequate.