HAN 300 FINAL EXAM QUESTIONS AND
ANSWERS 100% PASS 2026/2027
General concepts of insurance - ANS Insurance
protects against risk
Risk
the possibility of substantial financial loss from some event, where
probability of occurrence is small
Underwriting
evaluation, selection (or rejection), classification, and rating of risk
Four principles of insurance - ANS 1) Risk is unpredictable
2) Risk can be predicted with some accuracy in a large group
3) Insurance can transfer risk from the individual to group through pooling of resources
4) Losses are shared by all members
beneficiary - ANS the insured
premium - ANS amount charged to insurer to insure against risk
@2026 ALLRIGHTS RESERVED 1
,employer-employee cost sharing
risk rating - ANS Experience rating - premiums can be unaffordable for high-risk groups
Community rating - good risks subsidize poor risks
Adjusted community rating - overcomes some of the above drawbacks (*required by the ACA*)
cost sharing - ANS types:
deductible
copayment
coinsurance
why? reduces moral hazard. impacts lowering utilization without significant health
consequences
deductible - ANS Amount the insured pays first before benefits are paid by the plan
Applied annually
copayment - ANS flat amount paid per service
coinsurance - ANS set proportion of medical costs
vision and dental - ANS coverage for these are generally not included in health insurance
Group insurance - ANS type of private insurance
@2026 ALLRIGHTS RESERVED 2
,anticipates that a substantial number of people in the group will purchase insurance through its
sponsor.
because risk is spread out among the many insured, group insurance provides the advantage of
*lower costs* than if the same type of coverage was purchased in the individual insurance
market
Tax advantages when it is obtained through the employer
Comprehensive coverage is an anomaly to the fundamental concepts of insurance
self insurance - ANS type of private insurance
Spurred by public policy
No premium tax on employers
ERISA 1974
Exempt from some of the ACA requirements
the employer acts as its own insurere instead of obtaining insurance through an insurance
company. can protect themselves from risk of high losses by purchasing reinsurance
individual private health insurance - ANS Nongroup plans
Premiums based on individual's health and demographics
@2026 ALLRIGHTS RESERVED 3
, Many lost coverage under the ACA
small but important source of coverage. farmer, early retiree, self employed, and employee of
business that doesnt offer health insurance
managed care plans - ANS Initially, these plans were different from commercial health
insurance
Now, most health insurance is in the form of managed care plans
high deductible health plans/ savings options - ANS HRA:
Funded by the employer
HDHP is optional
HSA:
Employer contribution is optional
HDHP is required
combine a savings option with a health insurance plan carrying a high deductible. premiums are
generally lower because of the high deductibles.
Medigap - ANS Medicare supplement insurance
- To cover the high out-of-pocket costs in the original Medicare program
- Not available to those covered by Medicare Advantage (Part C of Medicare)
Influence of financing on the delivery of health care - ANS Financing is needed to pay health
insurance premiums
@2026 ALLRIGHTS RESERVED 4
ANSWERS 100% PASS 2026/2027
General concepts of insurance - ANS Insurance
protects against risk
Risk
the possibility of substantial financial loss from some event, where
probability of occurrence is small
Underwriting
evaluation, selection (or rejection), classification, and rating of risk
Four principles of insurance - ANS 1) Risk is unpredictable
2) Risk can be predicted with some accuracy in a large group
3) Insurance can transfer risk from the individual to group through pooling of resources
4) Losses are shared by all members
beneficiary - ANS the insured
premium - ANS amount charged to insurer to insure against risk
@2026 ALLRIGHTS RESERVED 1
,employer-employee cost sharing
risk rating - ANS Experience rating - premiums can be unaffordable for high-risk groups
Community rating - good risks subsidize poor risks
Adjusted community rating - overcomes some of the above drawbacks (*required by the ACA*)
cost sharing - ANS types:
deductible
copayment
coinsurance
why? reduces moral hazard. impacts lowering utilization without significant health
consequences
deductible - ANS Amount the insured pays first before benefits are paid by the plan
Applied annually
copayment - ANS flat amount paid per service
coinsurance - ANS set proportion of medical costs
vision and dental - ANS coverage for these are generally not included in health insurance
Group insurance - ANS type of private insurance
@2026 ALLRIGHTS RESERVED 2
,anticipates that a substantial number of people in the group will purchase insurance through its
sponsor.
because risk is spread out among the many insured, group insurance provides the advantage of
*lower costs* than if the same type of coverage was purchased in the individual insurance
market
Tax advantages when it is obtained through the employer
Comprehensive coverage is an anomaly to the fundamental concepts of insurance
self insurance - ANS type of private insurance
Spurred by public policy
No premium tax on employers
ERISA 1974
Exempt from some of the ACA requirements
the employer acts as its own insurere instead of obtaining insurance through an insurance
company. can protect themselves from risk of high losses by purchasing reinsurance
individual private health insurance - ANS Nongroup plans
Premiums based on individual's health and demographics
@2026 ALLRIGHTS RESERVED 3
, Many lost coverage under the ACA
small but important source of coverage. farmer, early retiree, self employed, and employee of
business that doesnt offer health insurance
managed care plans - ANS Initially, these plans were different from commercial health
insurance
Now, most health insurance is in the form of managed care plans
high deductible health plans/ savings options - ANS HRA:
Funded by the employer
HDHP is optional
HSA:
Employer contribution is optional
HDHP is required
combine a savings option with a health insurance plan carrying a high deductible. premiums are
generally lower because of the high deductibles.
Medigap - ANS Medicare supplement insurance
- To cover the high out-of-pocket costs in the original Medicare program
- Not available to those covered by Medicare Advantage (Part C of Medicare)
Influence of financing on the delivery of health care - ANS Financing is needed to pay health
insurance premiums
@2026 ALLRIGHTS RESERVED 4
