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CEBS GBA Exam 1- Comprehensive
Q&A For Certification Success 2026
Describe Indemnity Plans (Mod 3.1) - correct-answer -The 1st employment based
medical plans covered catastrophic losses (inpatient hospital expenses) - later
added outpatient, diagnostic and physician services. Early programs and their
successors known as Indemnity Plans (or traditional, fee-for services). They pay a
percentage of cost of treatment (100% Emergency/Preventative and 80% all
other) and don't require permission to access specialty.
Describe Managed Care (Mod 3.1) - correct-answer -Insurance carriers have a role
in steering health services/care while prepaying some portion of healthcare
services. The managed care model (in the form of Health Maintenance
Organizations - HMO's) all but replaced traditional indemnity plans.
Define common types of Employer Sponsored Health Plans (Mod 3.1) - correct-
answer -1: HMO (Health Maintenance Organization)
2: PPO (Preferred Provider Organization)
3: POS (Point of Service Plan)
4: HDHP (High Deductible Health Plan) - linked to Tax-Advantaged Savings Account
,2
How does an HMO operate? (Mod 3.1) - correct-answer -Requires individual to
select primary care physician (PCP) from a network of providers. PCP is
responsible for managing individual's care and if care is required beyond scope of
PCP, they will provide a referral to specialty care. No benefits (except emergency)
are available outside the Network. Out of pocket expenses (PCP/Specialty) are
routinely a flat dollar amount (copay) - no need to file for reimbursement.
How does a PPO operate? (Mod 3.1) - correct-answer -52% of Covered Workers
Enrolled;
Designed in response to HMO criticism, allows limited benefits for care received
out of the preferred network and requires no referral to see a specialist. If
specialist is in-network, coverage may be similarly structured with copays under
HMO. Outside network, cost is significantly higher.
How are POS plans part of a hybrid between HMO/PPO plans? (Mod 3.1) - correct-
answer -Offers in-network (preferred) and out of network (nonpreferred) benefits.
Individual may need to select PCP to obtain referrals for in-network specialty care.
Out of pocket expenses for in-network providers are copays (similar to HMO
cost...slightly higher) - no need to file for reimbursement. For out of network, out
of pocket expenses are not a flat dollar amount but a percentage (ex: 40%
common) of fees.
Contrast PPO's vs POS' (Mod 3.1) - correct-answer -Both overlap significantly.
Differences do include primary care provider requirement by POS but not PPO;
,3
lower copay amounts for preferred care in POS than in PPO; smaller network in a
POS than PPO.
Describe HDHP's (Mod 3.1) - correct-answer -Provides catastrophic insurance.
Trades lower premium cost to higher deductible by paying benefits only after
insured has incurred significant out of pocket expenses. Developed so individuals
have greater financial stake in healthcare decisions - manage expenses, offers
possibility of accumulating health care savings in tax-advantaged account (both
ER/EE contrib's)
What are the 3 types of savings options coupled with HDHP's? (Mod 3.2) - correct-
answer -1: FSA's (Flexible Spending Accounts) - before plan year, elect a certain
amount to be deducted on a pre-tax basis from check (not to exceed IRS limit of
$2,650). Available throughout the year for qualified expenses - cannot be
refunded for unused amount at end of plan year.
2: HRA's (Health Reimbursement Arrangements) - Employer Funded accounts
established to pay health care expenses - not required by law to roll over unused
contributions over plan year.
3: HSA's (Health Savings Accounts) - coupled with HDHP's. Owned by the EE and
funded with tax-free contributions made by EE, ER or both. Unused contributions
can be rolled over year to year. Penalties for money used for nonmedical expenses
before Age 65.
Contrast between an In-Network (Preferred) vs an Out-of-Network (Non-
Preferred) Provider (Mod 3.3) - correct-answer -In-Network: Contract with
, 4
individual's health insurance plan to provide services to the member at a discount
(for increased volume). Some plans may have a tiered structure with varying out
of pocket costs.
Out-of-Network: No contract with insurance plan...when available, costs are
considerably higher.
Define terms "Allowed Amount" and "usual, customary or reasonable (UCR) fee"
as related to Out-of-Network Benefits (Mod 3.3) - correct-answer -Terms used by
health plans to determine the maximum amount the plan will pay for covered
health services. Can also be called negotiated rate, payment allowance, etc. If the
provider charges more than the allowed amount by the health plan, the provider
can charge the member for the difference.
Describe special consideration given to preventative care (Mod 3.3) - correct-
answer -Treatments that fall under preventative (shots, mammograms,
cholesterol, etc) are covered w/o any deductibles, copays or coinsurance when in-
network. Now ACA mandates all preventative services are covered under group
health with no charge of ded, copay, coins (Mod 3.5)
Describe the history of prescription drug coverage (Mod 3.4) - correct-answer -In
the early days, PDC was a small portion of overall health and such expenses were
not covered. When coverage eventually became available, it was originally subject
to same deductibles/coinsurance as office visits, lab work and other outpatient
services. Today, it is traditionally carved out and administered by Pharmacy
Benefit Managers (PBM's), these are TPA's contracted to process claims and
CEBS GBA Exam 1- Comprehensive
Q&A For Certification Success 2026
Describe Indemnity Plans (Mod 3.1) - correct-answer -The 1st employment based
medical plans covered catastrophic losses (inpatient hospital expenses) - later
added outpatient, diagnostic and physician services. Early programs and their
successors known as Indemnity Plans (or traditional, fee-for services). They pay a
percentage of cost of treatment (100% Emergency/Preventative and 80% all
other) and don't require permission to access specialty.
Describe Managed Care (Mod 3.1) - correct-answer -Insurance carriers have a role
in steering health services/care while prepaying some portion of healthcare
services. The managed care model (in the form of Health Maintenance
Organizations - HMO's) all but replaced traditional indemnity plans.
Define common types of Employer Sponsored Health Plans (Mod 3.1) - correct-
answer -1: HMO (Health Maintenance Organization)
2: PPO (Preferred Provider Organization)
3: POS (Point of Service Plan)
4: HDHP (High Deductible Health Plan) - linked to Tax-Advantaged Savings Account
,2
How does an HMO operate? (Mod 3.1) - correct-answer -Requires individual to
select primary care physician (PCP) from a network of providers. PCP is
responsible for managing individual's care and if care is required beyond scope of
PCP, they will provide a referral to specialty care. No benefits (except emergency)
are available outside the Network. Out of pocket expenses (PCP/Specialty) are
routinely a flat dollar amount (copay) - no need to file for reimbursement.
How does a PPO operate? (Mod 3.1) - correct-answer -52% of Covered Workers
Enrolled;
Designed in response to HMO criticism, allows limited benefits for care received
out of the preferred network and requires no referral to see a specialist. If
specialist is in-network, coverage may be similarly structured with copays under
HMO. Outside network, cost is significantly higher.
How are POS plans part of a hybrid between HMO/PPO plans? (Mod 3.1) - correct-
answer -Offers in-network (preferred) and out of network (nonpreferred) benefits.
Individual may need to select PCP to obtain referrals for in-network specialty care.
Out of pocket expenses for in-network providers are copays (similar to HMO
cost...slightly higher) - no need to file for reimbursement. For out of network, out
of pocket expenses are not a flat dollar amount but a percentage (ex: 40%
common) of fees.
Contrast PPO's vs POS' (Mod 3.1) - correct-answer -Both overlap significantly.
Differences do include primary care provider requirement by POS but not PPO;
,3
lower copay amounts for preferred care in POS than in PPO; smaller network in a
POS than PPO.
Describe HDHP's (Mod 3.1) - correct-answer -Provides catastrophic insurance.
Trades lower premium cost to higher deductible by paying benefits only after
insured has incurred significant out of pocket expenses. Developed so individuals
have greater financial stake in healthcare decisions - manage expenses, offers
possibility of accumulating health care savings in tax-advantaged account (both
ER/EE contrib's)
What are the 3 types of savings options coupled with HDHP's? (Mod 3.2) - correct-
answer -1: FSA's (Flexible Spending Accounts) - before plan year, elect a certain
amount to be deducted on a pre-tax basis from check (not to exceed IRS limit of
$2,650). Available throughout the year for qualified expenses - cannot be
refunded for unused amount at end of plan year.
2: HRA's (Health Reimbursement Arrangements) - Employer Funded accounts
established to pay health care expenses - not required by law to roll over unused
contributions over plan year.
3: HSA's (Health Savings Accounts) - coupled with HDHP's. Owned by the EE and
funded with tax-free contributions made by EE, ER or both. Unused contributions
can be rolled over year to year. Penalties for money used for nonmedical expenses
before Age 65.
Contrast between an In-Network (Preferred) vs an Out-of-Network (Non-
Preferred) Provider (Mod 3.3) - correct-answer -In-Network: Contract with
, 4
individual's health insurance plan to provide services to the member at a discount
(for increased volume). Some plans may have a tiered structure with varying out
of pocket costs.
Out-of-Network: No contract with insurance plan...when available, costs are
considerably higher.
Define terms "Allowed Amount" and "usual, customary or reasonable (UCR) fee"
as related to Out-of-Network Benefits (Mod 3.3) - correct-answer -Terms used by
health plans to determine the maximum amount the plan will pay for covered
health services. Can also be called negotiated rate, payment allowance, etc. If the
provider charges more than the allowed amount by the health plan, the provider
can charge the member for the difference.
Describe special consideration given to preventative care (Mod 3.3) - correct-
answer -Treatments that fall under preventative (shots, mammograms,
cholesterol, etc) are covered w/o any deductibles, copays or coinsurance when in-
network. Now ACA mandates all preventative services are covered under group
health with no charge of ded, copay, coins (Mod 3.5)
Describe the history of prescription drug coverage (Mod 3.4) - correct-answer -In
the early days, PDC was a small portion of overall health and such expenses were
not covered. When coverage eventually became available, it was originally subject
to same deductibles/coinsurance as office visits, lab work and other outpatient
services. Today, it is traditionally carved out and administered by Pharmacy
Benefit Managers (PBM's), these are TPA's contracted to process claims and
