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Free AHM-520 Exam Braindumps (page: 12)

Page 11 of 55
PDF with 215 Questions

The Kayak Company self funds the health plan for its employees. This plan is an example of a type of self-funded plan known as a general asset plan.

Because Kayak's plan is a general asset plan, the funds that Kayak sets aside for the health plan are

  1. subject to the claims of Kayak's creditors
  2. available to Kayak solely for the purpose of paying for the healthcare expenses of Kayak's covered employees
  3. placed in a trust fund established by Kayak to pay for the health plan
  4. considered separate from Kayak's current operating funds

Answer(s): A



The methods of alternative funding for health coverage can be divided into the following general categories:
Category A--Those methods that primarily modify traditional fully insured group insurance contracts Category B--Those methods that have either partial or total self funding

Typically, small employers are able to use some of the alternative funding methods in

  1. Both Category A and Category B
  2. Category A only
  3. Category B only
  4. Neither Category A nor Category B

Answer(s): C



Under the alternative funding method used by the Flair Company, Flair assumes financial responsibility for paying claims up to a specified level and deposits the funds necessary to pay these claims into a bank account that belongs to Flair. However, an insurer, which acts as an agent of Flair, makes the actual payment of claims from this account.
When claims exceed the specified level, the insurer pays the balance from its own funds. No state premium tax is levied on the amounts that Flair deposits into this bank account.

From the following answer choices, choose the name of the alternative funding method described.

  1. Retrospective-rating arrangement
  2. Premium-delay arrangement
  3. Reserve-reduction arrangement
  4. Minimum-premium plan

Answer(s): D



Under the alternative funding method used by the Trilogy Company, the insurer charges Trilogy an initial premium that is based on the assumption that claims will be 93% of the expected claims for the year. If claims exceed 93% of expected claims, then Trilogy must reimburse the insurer for any additional claims paid, up to 112% of expected claims. The insurer bears the responsibility for paying claims in excess of 112% of expected claims.

From the following answer choices, choose the name of the alternative funding method described.

  1. Retrospective-rating arrangement
  2. Premium-delay arrangement
  3. Reserve-reduction arrangement
  4. Minimum-premium plan

Answer(s): A






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