Free AHIP AHM-520 Exam Questions

Become AHIP Certified with updated AHM-520 exam questions and correct answers

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Total 215 Questions | Updated On: Sep 23, 2026

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Question 1

The Jasmine Company, which self-funds the health plan for its 200 employees, has established a 501(c)(9) trust as a means of addressing possible claims fluctuations under the health plan. This plan is not a part of a collective bargaining process.

A potential disadvantage to Jasmine of using a 501(c)(9) trust is that:

A : The cost of maintaining the trust may be prohibitive to Jasmine

B : The trust must always maintain enough assets to pay the health plan's claims that have been incurred but not yet paid

C : Jasmine is prohibited from earning any return on the trust assets

D : The contributions to this trust are not deductible for federal income tax purposes

Answer: A

Question 2

The Fairway health plan is a for-profit health plan that issues stock. The following data was taken from Fairway's financial statements:

Current assets.....$5,000,000 -

Total assets.....$6,000,000 -

Current liabilities.....$2,500,000

Total liabilities.....$3,600,000

Stockholders' equity.....$2,400,000

Fairway's total revenues for the previous financial period were $7,200,000, and its net income for that period was $180,000.

For the previous financial period, Fairway's net profit margin was:

A : 2.50%

B : 3.00%

C : 3.60%

D : 7.50%

Answer: A

Question 3

The following statements illustrate the use of different rating methods by health plans: The Dover health plan established rates for small groups by using a rating method which requires that the average premium in each group cannot be more than 120% of the average premium for any other group. Under this method, all members of each group pay the same premium, which is based on the experience of the group.

Under the rating method used by the Rolling Hills health plan, the health plan calculates the ratio of a group's experience to the group's historical manual rate. Rolling Hills then multiplies this ratio by the group's future manual rate. Rolling Hills cannot consider the group's experience in determining premium rates. From the following answer choices, select the response that correctly indicates the rating methods used by Dover and Rolling Hills.

A : Dover = modified community ratingRolling Hills = factored rating

B : Dover = modified community ratingRolling Hills = adjusted community rating (ACR)

C : Dover = community rating by class (CRC)Rolling Hills = factored rating

D : Dover = community rating by class (CRC)Rolling Hills = adjusted community rating (ACR)

Answer: D

Question 4

Federal law addresses the relationship between Medicare- or Medicaid contracting health plans and providers who are at "substantial financial risk."

Under federal law, Medicare- or Medicaid-contracting health plans:

A : Place a provider at "substantial risk" whenever incentive arrangements put the provider at risk for amounts in excess of 10% of his or her total potential reimbursement for providing services to Medicare and Medicaid enrollees

B : Must provide stop-loss coverage to a provider who is placed at "substantial financial risk" for services that the provider does not directly provide to Medicare or Medicaid enrollees

C : Both A and B

D : A only

E : B only

F : Neither A nor B

Answer: C

Question 5

A health plan can use segment margins to evaluate the profitability of its profit centers.

One characteristic of a segment margin is that this margin:

A : Is the portion of the contribution margin that remains after a segment has covered its direct fixed costs

B : Incorporates only the costs attributable to a segment, but it does not incorporate revenues

C : Considers only a segment's costs that fluctuate in direct proportion to changes in the segment's level of operating activity

D : Evaluates the profit center's effective use of assets employed to earn a profit

Answer: A

Page: 1 / 43

Total 215 Questions | Updated On: Sep 23, 2026

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