Question

A small business wants to meet the minimum medical loss ratio required. If projections show that the business will pay out an average of $8,900 per policy holder in health care claims, what is the minimum average premium they should charge per policy holder?

Answer 1

$7120 or $7565 is the minimum average premium they should charge per policy holder

Explanation:

Small business can charge 80-85% of the total value of the policy as premium.

In this case the spending per policy holder is $8900

Hence, per policy holder has to pay a premium of

80-85% of $8900

$7120 or $7565 is the minimum average premium they should charge per policy holder