What do the future liabilities on the Annual Report represent?

• A. Current medical expenses only
• B. Probable total future cost of compensation for the injury or disease
• C. Estimated payroll costs
• D. Amount of past due benefits

Answer: (B)

Future liabilities on the Annual Report are the estimated total future cost of compensation for the injury or disease. This means the probable amount that will be paid in benefits over the life of the claim, including both medical costs and indemnity/wage-replacement benefits, not just what is owed right now. It’s an actuarial estimate of all future payments for current and developing claims, discounted to a present value as appropriate. It’s not simply current medical expenses, not payroll costs, and not past-due benefits, which are separate concepts.