1. For an employer with 500 employees and a history of medical use that shows on average, five employees go to the ER each year, calculate the pure premium and actual premium for a policy that covers this event under the following assumptions.

ER costs are $1000 per visit.

Medical loss ratio = 85%.

Deductible = $100.

Coinsurance rate = 20%.

2. For an employer with 500 employees and a history of medical use that shows on average, 450 employees go to urgent care clinics each year, calculate the pure premium and actual premium for a policy that covers this event under the following assumptions.

Urgent care costs are $150 per visit.

Medical loss ratio = 75%.

Deductible = $100.

Coinsurance rate = 20%.