A group health plan automatically enrolls every full-time employee and requires no evidence of insurability. Compared with voluntary individual enrollment, this structure tends to reduce adverse selection because:

Why A is correct

Adverse selection concentrates when only high-risk people choose coverage. Automatic, broad enrollment forces healthy and unhealthy employees into the same pool, so the group's risk mix approximates the general population rather than being skewed toward the sick. This risk-distribution effect is why group insurance with mandatory participation is less vulnerable to anti-selection than individually purchased coverage, and why insurers and employers favor wide participation.

Why the other options are wrong

• B) Broad enrollment balances risk; it does not itself guarantee any particular profit outcome.
• C) Employees remain free to leave employment or coverage; participation structure does not lock anyone in.
• D) Medical underwriting may still be used or waived for reasons of plan design, but the point is the balanced mix, not the impossibility of underwriting.

Memory hook

Everyone in the boat keeps it level. Volunteers-only lifeboats fill up with the riskiest swimmers.