The employees of General Manufacturing Corp. receive health insurance through a group plan issued by Wellnet. During the past year, 40 percent of the employees did not file any health insurance claims, 30 percent filed only a small claim, and 20 percent filed a large claim. The small claims were spread uniformly between 0 and $2,000, whereas the large claims were spread uniformly between $2,000 and $20,000.
Based on this experience, Wellnet now is negotiating the corporation’s premium payment per employee for the upcoming year. To obtain a close estimate of the average cost of insurance coverage for the corporation’s employees, use ASPE with a spreadsheet to perform 1,000 trials of a simulation of an employee’s health insurance experience. Generate a frequency chart and a statistics table.