With health insurance, the income of one year must cover the expenditure of the same year. This system is known as apportionment.
The apportionment procedure means that health insurance companies have to cover their costs in a year using the annual premiums of the same year.
What does the apportionment procedure mean for insurers?
Health insurance companies have to set their premiums for the year ahead so that they cover the expected cost of claims.
What does the apportionment procedure mean for insureds?
The apportionment procedure guarantees that insureds will have their health costs reimbursed by the health insurer as part of their insurance contract.
Where else is the apportionment procedure used?
The apportionment procedure is also used for the old-age and survivors’ insurance (AHV/AVS) and unemployment insurance (ALV).