AHM-510 Online Practice Questions and Answers

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.

Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses.

In creating Diversified, Tidewater formed the type of company known as

A. A mutual holding company

B. A spin-off company

C. An upstream holding company

D. A downstream holding company

Greenpath Health Services, Inc., an HMO, recently terminated some providers from its network in response to the changing enrollment and geographic needs of the plan. A provision in Greenpath's contracts with its healthcare providers states that Greenpath can terminate the contract at any time, without providing any reason for the termination, by giving the other party a specified period of notice.

The state in which Greenpath operates has an HMO statute that is patterned on the NAIC HMO Model Act, which requires Greenpath to notify enrollees of any material change in its provider network. As required by the HMO Model Act, the state insurance department is conducting an examination of Greenpath's operations. The scope of the on-site examination covers all aspects of Greenpath's market conduct operations, including its compliance with regulatory requirements.

With respect to the type of change that constitutes a material change under the HMO Model Act's disclosure requirements, the termination of one healthcare provider from Greenpath's provider network

A. Always qualifies as a material change in the plan, and Greenpath must report the change to all plan enrollees

B. Always qualifies as a material change in the plan, and Greenpath must report the change to only those plan enrollees who have received care from the terminated provider

C. Qualifies as a material change in the plan only if the provider is a primary care provider, and in such a case Greenpath must report the change to all plan enrollees

D. Qualifies as a material change in the plan only if the provider is a primary care provider, and in such a case Greenpath must report the change to only those plan enrollees who receive primary care from the terminated provider

The government uses various tools within the realm of two broad categories of public policy-allocative policies and regulatory policies. In the context of public policy, laws that fall into the category of allocative policy include

A. The Balanced Budget Act (BBA) of 1997

B. The Health Insurance Portability and Accountability Act (HIPAA) of 1996

C. Laws affecting health plan quality oversight

D. Laws specifying procedures for health plan handling of consumer appeals and grievances

Health plans are allowed to appeal rules or regulations that affect them. Generally, the grounds for such appeals are limited either to procedural grounds or jurisdictional grounds. The Kabyle Health Plan appealed the following new regulations:

Appeal 1 - Kabyle objected to this regulation on the ground that this regulation is inconsistent with the law.

Appeal 2 - Kabyle objected to this regulation because it believed that the subject matter was outside the realm of issues that are legal for inclusion in the regulatory agency's regulations.

Appeal 3 - Kabyle objected to the process by which this regulation was adopted.

Of these appeals, the ones that Kabyle appealed on jurisdictional grounds were

A. Appeals 1, 2, and 3

B. Appeals 1 and 2 only

C. Appeals 1 and 3 only

D. Appeals 2 and 3 only

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba.

With regard to the state in which Tidewater is domiciled, it is correct to say that, from the perspective of both Ontario and Manitoba, Tidewater is considered to be the type of corporation known as:

A. A foreign corporation

B. An alien corporation

C. A sister corporation

D. A domestic corporation

The Tidewater Life and Health Insurance Company is owned by its policy owners, who are entitled to certain rights as owners of the company, and it issues both participating and nonparticipating insurance policies. Tidewater is considering converting to the type of company that is owned by individuals who purchase shares of the company's stock. Tidewater is incorporated under the laws of Illinois, but it conducts business in the Canadian provinces of Ontario and Manitoba. Tidewater established the Diversified Corporation, which then acquired various subsidiary firms that produce unrelated products and services. Tidewater remains an independent corporation and continues to own Diversified and the subsidiaries. In order to create and maintain a common vision and goals among the subsidiaries, the management of Diversified makes decisions about strategic planning and budgeting for each of the businesses.

Tidewater's participating policy owners have the right to

A. Elect the board of directors on the basis of one vote per policy owner

B. Elect the board of directors on the basis of one vote for each policy a person owns

C. Participate in developing a corporate mission statement and strategic plans

D. Receive stock dividends for each policy they own

States may impose nominal deductibles, coinsurance, or copayments on some Medicaid recipients for certain services. Services for which states can require copayments from Medicaid recipients include:

A. Emergency services

B. Family planning services

C. Both A and B

D. A only

E. B only

F. Neither A nor B

The Opal Health Plan complies with all of the provisions of the Newborns' and Mothers' Health Protection Act of 1996 (NMHPA). Samantha Hill and Debra Chao are Opal enrollees. Ms. Hill was hospitalized for a cesarean birth, and Ms. Chao was hospitalized for a normal delivery. From the following answer choices, select the response that indicates the minimum hospital stay for which Opal, under NMHPA, must provide benefits for Ms. Hill and Ms. Chao.

A. Ms. Hill: 72 hours; Ms. Chao: 24 hours

B. Ms. Hill: 72 hours; Ms. Chao: 48 hours

C. Ms. Hill: 96 hours; Ms. Chao: 24 hours

D. Ms. Hill: 96 hours; Ms. Chao: 48 hours

A federal law that significantly affects health plans is the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In order to comply with HIPAA provisions, issuers offering group health coverage generally must.

A. Renew group health policies in both small and large group markets, regardless of the health status of any group member

B. Provide a plan member with a certificate of creditable coverage at the time the member enrolls in the group plan

C. Both A and B

D. A only

E. B only

F. Neither A nor B

Indigo Health Plan advertised a specific individual health insurance policy through a direct mail advertisement that provided detailed information about the product. In order to comply with theNAIC Model Rules Governing Advertisements of Accident and Sickness Insurance, Indigo must disclose whether the advertised policy contains any exceptions, reductions, or limitations. Thus, Indigo disclosed in the advertisement that one policy provision limits coverage for dental exams to $50 per exam and to one exam per calendar year. This information indicates that, with respect to the definitions in the NAIC Model Rules, Indigo's advertisement is an example of an

A. Invitation to contract, and it discloses a policy provision known as an exception

B. Invitation to contract, and it discloses a policy provision known as a reduction

C. Invitation to inquire, and it discloses a policy provision known as an exception

D. Invitation to inquire, and it discloses a policy provision known as a reduction