ACCIDENT AND HEALTH INSURANCE EXAM 6
PRACTICE QUESTIONS WITH DETAILED
EXPLANATIONS 2026
◉ XYZ Company has applied for group health insurance for its
employees. What information would the insurer's underwriters
likely use to determine the appropriate coverage and final premium
rate given to the group?
-Arrest reports
-AM Best rating
-Experience rating
-Credit reports.
Answer: Experience rating
◉ Who is financially liable for the payment of covered claims in a
fully insured group health plan?
-Insurer
-Health provider
-Guaranty Association
-Group member.
Answer: Insurer
,◉ Which of the following types of employee welfare plans is
specifically exempt from regulation under ERISA?
-Blue Cross-Blue Shield plans
-Accident plans
-Hospital benefit plans
-Church plans.
Answer: Church plans
◉ Which of the following statements about COBRA is CORRECT?
-The premium for continued group medical coverage may be up to
102% of the premium that would otherwise be charged.
-The employer must pay the cost of the continued group coverage.
-The schedule of benefits during the continuation period may be
different than those provided under the group plan.
-COBRA permits an employee to convert a group certificate to an
individual policy..
Answer: The premium for continued group medical coverage may be
up to 102% of the premium that would otherwise be charged.
◉ Which of the following is the purpose of medical cost
management?
-To influence hospital charges and doctors' fees
-To discourage individuals from utilizing health care services
,-To control health claim expenses
-To encourage individuals to seek medical help only as a last resort.
Answer: To control health claim expenses
◉ Which of the following is considered to be a point of service (POS)
plan?
-Managed care plan
-Preferred provider organization
-Protected care provider
-Restricted provider organization.
Answer: Managed care plan
◉ Which of the following best describes the characteristics of
Preferred Provider Organizations (PPOs)?
-PPOs are generally public in nature rather than private
-If service is obtained outside the PPO, benefits are reduced and
costs increase
-PPOs operate like an HMO on a prepaid basis
-Health care providers themselves are barred from forming a PPO
due to conflict of interest.
Answer: If service is obtained outside the PPO, benefits are reduced
and costs increase
, ◉ When comparing an HMO to a PPO, the PPO
-always requires service in a network
-always requires a referral to specialists
-is a prepaid medical service plan
-provides a greater choice of providers.
Answer: provides a greater choice of providers
◉ When a preferred provider organization (PPO) insured goes out-
of-network, which of the following actions occur?
-The benefits are taxable
-The insured will pay a reduced amount
-The insured has lower out-of-pocket expenses
-The insurer will pay a reduced amount.
Answer: The insurer will pay a reduced amount
◉ What is the name of a health care delivery system involving
private insurers who contract with doctors and hospitals to provide
services at set prices and allows insureds to choose among
designated doctors and hospitals when medical treatment and care
is needed?
-Health Insuring Corporation
-Administrative services organization
-Preferred provider organization
PRACTICE QUESTIONS WITH DETAILED
EXPLANATIONS 2026
◉ XYZ Company has applied for group health insurance for its
employees. What information would the insurer's underwriters
likely use to determine the appropriate coverage and final premium
rate given to the group?
-Arrest reports
-AM Best rating
-Experience rating
-Credit reports.
Answer: Experience rating
◉ Who is financially liable for the payment of covered claims in a
fully insured group health plan?
-Insurer
-Health provider
-Guaranty Association
-Group member.
Answer: Insurer
,◉ Which of the following types of employee welfare plans is
specifically exempt from regulation under ERISA?
-Blue Cross-Blue Shield plans
-Accident plans
-Hospital benefit plans
-Church plans.
Answer: Church plans
◉ Which of the following statements about COBRA is CORRECT?
-The premium for continued group medical coverage may be up to
102% of the premium that would otherwise be charged.
-The employer must pay the cost of the continued group coverage.
-The schedule of benefits during the continuation period may be
different than those provided under the group plan.
-COBRA permits an employee to convert a group certificate to an
individual policy..
Answer: The premium for continued group medical coverage may be
up to 102% of the premium that would otherwise be charged.
◉ Which of the following is the purpose of medical cost
management?
-To influence hospital charges and doctors' fees
-To discourage individuals from utilizing health care services
,-To control health claim expenses
-To encourage individuals to seek medical help only as a last resort.
Answer: To control health claim expenses
◉ Which of the following is considered to be a point of service (POS)
plan?
-Managed care plan
-Preferred provider organization
-Protected care provider
-Restricted provider organization.
Answer: Managed care plan
◉ Which of the following best describes the characteristics of
Preferred Provider Organizations (PPOs)?
-PPOs are generally public in nature rather than private
-If service is obtained outside the PPO, benefits are reduced and
costs increase
-PPOs operate like an HMO on a prepaid basis
-Health care providers themselves are barred from forming a PPO
due to conflict of interest.
Answer: If service is obtained outside the PPO, benefits are reduced
and costs increase
, ◉ When comparing an HMO to a PPO, the PPO
-always requires service in a network
-always requires a referral to specialists
-is a prepaid medical service plan
-provides a greater choice of providers.
Answer: provides a greater choice of providers
◉ When a preferred provider organization (PPO) insured goes out-
of-network, which of the following actions occur?
-The benefits are taxable
-The insured will pay a reduced amount
-The insured has lower out-of-pocket expenses
-The insurer will pay a reduced amount.
Answer: The insurer will pay a reduced amount
◉ What is the name of a health care delivery system involving
private insurers who contract with doctors and hospitals to provide
services at set prices and allows insureds to choose among
designated doctors and hospitals when medical treatment and care
is needed?
-Health Insuring Corporation
-Administrative services organization
-Preferred provider organization
