Run-off liability
Claims incurred but not yet reported when a plan changes.
When a plan terminates or changes funding arrangement, claims already incurred but not yet submitted remain payable. That outstanding obligation is the run-off liability, sometimes called IBNR — incurred but not reported.
It is a routine part of any funding transition, and it is also where employers most often get an unwelcome surprise.
What this means for a BC plan
Settle the run-off treatment in writing before moving a BC plan off ASO or between carriers. Discovering the obligation after the transition is a materially worse negotiating position.
Related terms
Where this comes up
Fully insured vs ASO · All glossary terms · Ask an advisor directly
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