PRINCIPLES OF HEALTH INSURANCE
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS
Also known as a Section 125 plan, which health insurance plan allows an employee to pick and
choose benefits that best fit their needs from a selection available by the insurer? -
ANS Cafeteria plan
When a business chooses to self-insure, its insurance paperwork and claims are often
administered and processed by which type of outside organization(s)? - ANS Administrative
Services Only (ASO)
Although claims are funded by the employer, the employer may still use an insurance company
for administrative purposes and claims processing, known as Administrative Services Only (ASO)
or Third Party Administrator (TPA).
All of the following are categories of basic health insurance EXCEPT: - ANS Universal health
insurance
Disability income insurance
Medical expense insurance
Accidental and dismemberment insurance
1 @COPYRIGHT 2025/2026.
,Which type of HMO model exclusively employees physicians and specialists on a salaried basis?
- ANS Staff Model
Also known as a Flexible Benefits Plan, what benefit program offers employees a choice
between permissible taxable benefits, including: cash, and nontaxable benefits such as life and
health insurance, vacations, retirement plans and child care? - ANS Cafeteria Plan
Emily is covered under a major medical health insurance policy that includes a $1,000
deductible and 80/20 coinsurance of the next $10,000 in medical expenses. What is Emily's
annual stop-loss? - ANS $3,000
All of the following are types of deductibles associated with major medical expense plans
EXCEPT: - ANS Participatory Deductible
Corridor Deductible
Flat Deductible
Integrated Deductible
Jennifer's comprehensive major medical policy has a $1,500 deductible and 60/40 coinsurance
of the next $5,000, then 100% thereafter. What is Jennifer's stop-loss? - ANS $3,500
Deductible + Coinsurance dollar amount = Out-of-Pocket Maximum
Step 1:
Determine the deductible amount : $1,500
Step 2:
Determine the coinsurance dollar amount : 40% of the next $5,000 = $2,000
2 @COPYRIGHT 2025/2026.
, Step 3:
Add the deductible amount of $1,500 to the coinsurance dollar amount of $2,000 to calculate
the maximum out-of-pocket limit of $3,500 for the calendar year.
All of the following statements correctly describe a deductible EXCEPT - ANS Deductibles are
associated with basic medical insurance, major medical insurance and dental insurance.
Most deductibles are considered to be 'all-cause;' however, a deductible can also be considered
'per-cause' depending on the insurer and plan chosen.
Three general types of deductibles exist in major medical insurance including 'corridor,'
'integrated' and 'flat' deductibles.
A deductible is the amount of medical expense that the policyholder must 'absorb,' or pay
before benefits are covered by the insurance company.
Unlike major medical and dental insurance, basic medical insurance is referred to as 'first-
dollar' coverage because it provides benefits up front to an insured individual without having to
satisfy any plan deductible.
Tim was recently hospitalized and underwent an unplanned surgery. As a result, he incurred a
total of $7,500 in medical expenses. Tim's major medical health insurance policy has a $3,500
deductible and 80/20 coinsurance with a stop-loss occurring at $5,000. According to his policy,
of the $7,500 in medical expenses, what amount is Tim responsible for paying? - ANS $4,300
Deductible + Coinsurance dollar amount = Stop-Loss (Out-of-Pocket Maximum)
Step 1:
Determine the deductible amount : $3,500
Step 2:
3 @COPYRIGHT 2025/2026.
EXAM 2025/2026 QUESTIONS AND
ANSWERS 100% PASS
Also known as a Section 125 plan, which health insurance plan allows an employee to pick and
choose benefits that best fit their needs from a selection available by the insurer? -
ANS Cafeteria plan
When a business chooses to self-insure, its insurance paperwork and claims are often
administered and processed by which type of outside organization(s)? - ANS Administrative
Services Only (ASO)
Although claims are funded by the employer, the employer may still use an insurance company
for administrative purposes and claims processing, known as Administrative Services Only (ASO)
or Third Party Administrator (TPA).
All of the following are categories of basic health insurance EXCEPT: - ANS Universal health
insurance
Disability income insurance
Medical expense insurance
Accidental and dismemberment insurance
1 @COPYRIGHT 2025/2026.
,Which type of HMO model exclusively employees physicians and specialists on a salaried basis?
- ANS Staff Model
Also known as a Flexible Benefits Plan, what benefit program offers employees a choice
between permissible taxable benefits, including: cash, and nontaxable benefits such as life and
health insurance, vacations, retirement plans and child care? - ANS Cafeteria Plan
Emily is covered under a major medical health insurance policy that includes a $1,000
deductible and 80/20 coinsurance of the next $10,000 in medical expenses. What is Emily's
annual stop-loss? - ANS $3,000
All of the following are types of deductibles associated with major medical expense plans
EXCEPT: - ANS Participatory Deductible
Corridor Deductible
Flat Deductible
Integrated Deductible
Jennifer's comprehensive major medical policy has a $1,500 deductible and 60/40 coinsurance
of the next $5,000, then 100% thereafter. What is Jennifer's stop-loss? - ANS $3,500
Deductible + Coinsurance dollar amount = Out-of-Pocket Maximum
Step 1:
Determine the deductible amount : $1,500
Step 2:
Determine the coinsurance dollar amount : 40% of the next $5,000 = $2,000
2 @COPYRIGHT 2025/2026.
, Step 3:
Add the deductible amount of $1,500 to the coinsurance dollar amount of $2,000 to calculate
the maximum out-of-pocket limit of $3,500 for the calendar year.
All of the following statements correctly describe a deductible EXCEPT - ANS Deductibles are
associated with basic medical insurance, major medical insurance and dental insurance.
Most deductibles are considered to be 'all-cause;' however, a deductible can also be considered
'per-cause' depending on the insurer and plan chosen.
Three general types of deductibles exist in major medical insurance including 'corridor,'
'integrated' and 'flat' deductibles.
A deductible is the amount of medical expense that the policyholder must 'absorb,' or pay
before benefits are covered by the insurance company.
Unlike major medical and dental insurance, basic medical insurance is referred to as 'first-
dollar' coverage because it provides benefits up front to an insured individual without having to
satisfy any plan deductible.
Tim was recently hospitalized and underwent an unplanned surgery. As a result, he incurred a
total of $7,500 in medical expenses. Tim's major medical health insurance policy has a $3,500
deductible and 80/20 coinsurance with a stop-loss occurring at $5,000. According to his policy,
of the $7,500 in medical expenses, what amount is Tim responsible for paying? - ANS $4,300
Deductible + Coinsurance dollar amount = Stop-Loss (Out-of-Pocket Maximum)
Step 1:
Determine the deductible amount : $3,500
Step 2:
3 @COPYRIGHT 2025/2026.
