Average high cost multiple
In unemployment insurance in the United States, the average high-cost multiple is a commonly used actuarial measure of Unemployment Trust Fund adequacy. Technically, AHCM is defined as reserve ratio divided by average cost rate of three high-cost years in the state's recent history. In this definition, cost rate for any duration of time is defined as benefit cost divided by total wages paid in covered employment for the same duration, usually expressed as a percentage.
Intuitively, the AHCM provides an estimate of the length of time current reserve in the trust fund can pay out benefits at historically high payout rate. For example, if a state's AHCM is 1.0 immediately prior to a recession, and if the incoming recession is of the average magnitude of the past three recessions, then the state is expected to be able to pay one year of UI benefits using the money already in its trust fund alone. If the AHCM is 0.5, then the state is expected to be able to pay out six months of benefits when the a similar recession hits.