Free AHIP AHM-520 Exam Questions

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:

The purest form of a self-funded benefit plan is one in which the employer pays benefits from current revenue, administers all aspects of the plan, and bears the risk that actual benefit payments will exceed the expected amount of payments. A decision to use this kind of self-funding is generally considered most desirable when certain conditions are present.

These conditions most likely include that the benefit plan:

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:

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.

Assume that the healthcare industry average for the debt-to-equity ratio is 0.90.

The following statement(s) can correctly be made about Fairway's debt to equity ratio:

In order to determine a health plan's quick liquidity ratio, a financial analyst would divide the health plan's: