Nc Health Insurance Practice Exam
Elevate your understanding of North Carolina health insurance through our comprehensive practice exam quiz. Navigate the intricacies of policies, coverage, and regulations in the state. Test your grasp of premium calculations, benefit structures, and key terminologies. Whether you're aiming for licensure or aiming to understand your coverage better, this quiz offers a diverse range of questions that mirror real-world scenarios. Challenge yourself by tackling questions on deductibles, copayments, and provider networks. Prepare to excel with this interactive tool that sharpens your knowledge and boosts your confidence in navigating the complex landscape of health insurance in North Carolina.
- 1.
Which of the following is not one of the 12 required provisions for healthinsurance policies set forth by the NAIC?
- A.
Entire contract provision
- B.
Grace period provision
- C.
Waiver of premium provision
- D.
time limit on certain defenses provision
Correct Answer
C. Waiver of premium provisionExplanation
The waiver of premium provision is not one of the 12 required health insurance policy provisions.Rate this question:
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- 2.
For which of the following transactions does a person need more thanan insurance license?
- A.
Selling variable life insurance
- B.
Comparing an existing policy with one that is being recommended.
- C.
Selling indeterminate premium whole life insurance (for example, universal life insurance).
- D.
Replacing an existing life insurance policy with one that is recommended by the producer.
Correct Answer
A. Selling variable life insuranceExplanation
As long as the policy is based on the insurer's general account (meaning interest rates are fixed), only a life insurance
license is required.Rate this question:
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- 3.
Beatrice is a member of the Supreme Lodge fraternal benefit society.What must Beatrice do before she can sell insurance on its behalf?
- A.
obtain a restricted agent's license
- B.
obtain a surplus lines license
- C.
become a licensed agent with a specialty in fraternal lines insurance comply with
- D.
comply with the same general licensing requirements that apply to resident agents
Correct Answer
D. comply with the same general licensing requirements that apply to resident agentsExplanation
Agents of fraternal benefit societies must comply with the same general laws governing licensing that apply to
resident and nonresident agents.Rate this question:
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- 4.
Which of the following best characterizes how overinsurance affectsinsurers?
- A.
If many insurers are insuring for the same risk, it limits the ability of the insured to seek damages if the claim is ever denied.
- B.
If many insurers are insuring for the same risk, the insured will receive duplicate benefits from multiple insureds.
- C.
If many insurers are insuring for the same risk, it limits the liability of any one insurer's policy to the proportion of the total benefits it assumes.
- D.
If many insurers are insuring for the same risk, the insured may end up receiving no benefits if all insurers cancel the coverage.
Correct Answer
C. If many insurers are insuring for the same risk, it limits the liability of any one insurer's policy to the proportion of the total benefits it assumes.Explanation
If many insurers are insuring for the same risk, then it limits the liability of any one insurer's policy to the proportion of
the total benefits it assumes.Rate this question:
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- 5.
If an insurer issues a disability income policy that pays a set monthlybenefit of $500, which approach is the insurer using?
- A.
Percentage limitation approach
- B.
incomeformula approach
- C.
flat-rate approach
- D.
specified benefit approach
Correct Answer
C. flat-rate approachExplanation
An individual disability income policy that is issued with a benefit that is a stated amount uses a flatrate
approach.Rate this question:
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- 6.
Roy has an insurance policy that pays a fixed sum directly to him foreach day he spends in a hospital. What type of insurance policy doesRoy have?
- A.
a basic medical expense policy
- B.
a major medical policy
- C.
a comprehensive policy
- D.
a hospital indemnity policy
Correct Answer
D. a hospital indemnity policyExplanation
A hospital indemnity policy provides cash benefits that the insured may use as he or she sees fit. The benefit amount
per day is predetermined and paid regardless of any other coverage the insured may have.Rate this question:
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- 7.
Medical expense policies cover a wide range of services and care. Theway in which they cover the cost of these services and the way in whichcovered care services are delivered depends on which of the following?
- A.
state insurance law
- B.
the plan or policy
- C.
the insured's age and health
- D.
the insurer's marketing of these services
Correct Answer
B. the plan or policyExplanation
The way in which covered care services are delivered depends on the plan or policy.Rate this question:
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- 8.
All of the following services are generally covered under MedicaidEXCEPT:
- A.
cosmetic surgery
- B.
mental health services
- C.
rural health clinic services
- D.
prescription drug services
Correct Answer
A. cosmetic surgeryExplanation
Medicaid covers necessary medical services, including transportation, as well as necessary prescription drugs.
Cosmetic surgery is not covered.Rate this question:
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- 9.
All of the following are examples of hazards EXCEPT:
- A.
Ron tends to forget to wear his seat belt when he drives.
- B.
Sue is a heavy cigarette smoker.
- C.
John is taking medications to control his high blood pressure.
- D.
Jane, a business owner, refuses to fix a broken sidewalk in front of her shop because she and the town cannot agree on who must repair it.
Correct Answer
C. John is taking medications to control his high blood pressure.Explanation
A hazard is a condition that increases the number of losses or the severity of losses. Taking medications to control a
life-threatening disease is a hazard-reduction technique.Rate this question:
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- 10.
Emil, an agent licensed in North Carolina, moves to a new home on April30. He is required to notify the North Carolina Department of Insuranceby what date?
- A.
May 7
- B.
May 10
- C.
May 30
- D.
October 31
Correct Answer
B. May 10Explanation
An agent who changes his or her residential or email address must notify the Insurance Department within ten days
of the change.Rate this question:
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- 11.
How is a person who is covered by a medical expense insurance plancommonly referred to?
- A.
insured or subscriber
- B.
patient
- C.
customer or client
- D.
risk
Correct Answer
A. insured or subscriberExplanation
Generally, the person who is covered by a medical expense insurance plan is called an insured or a subscriber.Rate this question:
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- 12.
Which statement about the coverage of chemical dependency under agroup health insurance policy is CORRECT?
- A.
A group health insurance policy is required to cover treatment for chemical dependency.
- B.
A group health insurance policy can provide different benefits for chemical dependency than for other illnesses.
- C.
A group health insurance policy cannot set limits on the amount of benefits payable for chemical dependency.
- D.
A group policyholder must have the option to purchase coverage for chemical dependency treatment.
Correct Answer
D. A group policyholder must have the option to purchase coverage for chemical dependency treatment.Explanation
Group accident and health insurance policies must contain an optional rider allowing certificate holders to obtain
coverage for chemical dependency. Benefits for chemical dependency must be subject to the same durational limits,
dollar limits, deductibles, and coinsurance factors that apply to benefits for physical illness generally.Rate this question:
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- 13.
To qualify for an insurance agent's license, a person must have all of thefollowing EXCEPT:
- A.
college degree
- B.
good reputation and character
- C.
licensing fee
- D.
18 years of age
Correct Answer
A. college degreeExplanation
To qualify for a license, an applicant must be at least 18 years old, complete a prelicensing education program, pay
the licensing fees, and pass the required state examination. An applicant also must not have been convicted of a
felony or crime involving dishonesty or fraud.Rate this question:
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- 14.
Which statement about disability reducing term insurance policies isNOT correct?
- A.
The business owner typically buys a policy to cover the term of a loan.
- B.
The policy pays off the loan balance if the business owner becomes disabled during the policy term.
- C.
The benefit payment under such policies increases over the policy's term.
- D.
Reducing term insurance is fairly inexpensive.
Correct Answer
C. The benefit payment under such policies increases over the policy's term.Explanation
Because the policy's benefit payments are tied to the reducing balance on the business owner's loan, the benefit
payment decreases over the policy's term.Rate this question:
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- 15.
Under the Patient Protection and Affordable Care Act, until when aredependent children eligible to be covered under their parent’s groupmedical insurance policy?
- A.
age 19
- B.
Age 22
- C.
age 26
- D.
They become married.
Correct Answer
C. age 26Explanation
A group health plan that offers dependent coverage must continue such coverage for an employee's adult child until
the child turns 26 years old, whether or not the child is married. Plans are not required to cover the spouse or child of
eligible children.Rate this question:
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- 16.
Medicare Part A hospital insurance covers, within certain limits, all ofthe following expenses, EXCEPT
- A.
Inpatient hospital costs.
- B.
long-term care costs.
- C.
home health-care costs.
- D.
hospice costs.
Correct Answer
B. long-term care costs.Explanation
Within certain limits, Medicare Part A covers skilled nursing facility costs, but not long-term care costs.Rate this question:
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- 17.
Delta Inc. pays the premiums on a disability buyoutpolicy, a business overhead policy, and a key executive disability policy. For which policiescan it take an income tax deduction for the premiums it pays?
- A.
disability buy-out policy
- B.
business overhead policy
- C.
business overhead policy and key executive disability policy
- D.
disability buy-out policy, business overhead policy, and key executive disability policy
Correct Answer
B. business overhead policyExplanation
Premiums paid for a business overhead policy are deductible as a business expense. Premiums for a key executive
(or key employee) disability income policy or a disability buy-out policy are not tax deductible, but benefits are
received income tax free.Rate this question:
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- 18.
During the application process, insurance coverage can be providedunder a conditional receipt or which of the following?
- A.
an interim receipt
- B.
a temporary insurance receipt
- C.
a waiting period receipt
- D.
a grace period receipt
Correct Answer
B. a temporary insurance receiptExplanation
An alternative to the conditional receipt that insurers sometimes use in their application process is a temporary
insurance receipt.Rate this question:
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- 19.
What is the term for deliberately withholding material facts when applying for insurance?
- A.
concealment
- B.
collusion
- C.
twisting
- D.
waiver
Correct Answer
A. concealmentExplanation
Concealment is deliberately withholding material facts when applying for insurance. If the concealed facts would have
changed the insurer's decision to offer the insurance policy, then the insurer can void the insurance contract.Rate this question:
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- 20.
Harvey's health insurance policy covers only treatment for cancer. Whattype of insurance policy does Harvey have?
- A.
a basic medical expense policy
- B.
a restricted policy
- C.
a dread disease policy
- D.
a cancer policy
Correct Answer
C. a dread disease policyExplanation
Dread disease coverage may be issued as a stand-alone policy or as a rider to a life insurance policy. It pays cash to the insured to be used however he or she sees fit, usually to cover the costs associated with treating the medical condition specified in the policy.Rate this question:
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- 21.
Which of the following represents consideration under the terms of aninsurance policy contract?
- A.
the insurer's promise to renew the contract
- B.
the policy's benefits
- C.
the premium paid
- D.
any claims paid
Correct Answer
C. the premium paidExplanation
The consideration clause establishes that in exchange for the consideration paid, the premium, the insurer promises
to indemnify the insured against loss covered by the terms of the policy.Rate this question:
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- 22.
Which of the following groups would typically NOT be eligible for groupaccident and health insurance?
- A.
association group
- B.
neighborhood group
- C.
labor union
- D.
employer group
Correct Answer
B. neighborhood groupExplanation
Employer groups, association groups, and labor unions are eligible for group accident and health insurance.
Neighborhood groups are not an approved group.Rate this question:
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- 23.
Gracie owns a Medicare Advantage policy and requires emergency carewhile visiting her daughter, but there are no network providers nearby.What should Gracie do?
- A.
travel home where she can see a network provider
- B.
see a nonnetwork provider
- C.
forego treatment
- D.
get approval from Medicare before seeing a nonnetwork provider
Correct Answer
B. see a nonnetwork providerExplanation
A Medicare Advantage policy or certificate must provide payment for full coverage under the policy for covered
emergency services that are not available through network providers.Rate this question:
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- 24.
Dan, age 43, is applying for an individual health insurance policy. Theapplication asks about his current health and whether he has any knownmedical conditions. Dan discloses that he is partially blind, which wouldbe considered which of the following?
- A.
a peril
- B.
A moral hazard
- C.
a morale hazard
- D.
a physical hazard
Correct Answer
D. a pHysical hazardExplanation
A hazard is a characteristic that increases the chance of a peril occurring. A physical hazard is a physical
characteristic, such as blindness, that increases the chance of loss. A physical hazard exists due to a person's
physical condition as opposed to arising from his or her character.Rate this question:
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- 25.
Which of the following best illustrates risk transfer?
- A.
Anita purchases health insurance to protect herself in the event of a serious illness.
- B.
Abigail refuses to buy a home and continues to rent because she thinks homeowners insurance is too expensive.
- C.
Anne refuses to venture out after dark, citing the fear of being assaulted.
- D.
Arlene decides not to purchase life insurance because she has no dependents and plenty of cash in her savings accounts to cover any final expenses.
Correct Answer
A. Anita purchases health insurance to protect herself in the event of a serious illness.Explanation
In risk transfer, an individual or business transfers the risk of loss to an insurance company in return for the payment
of a premium.Rate this question:
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- 26.
What is the goal of the relation of earnings to insurance provision?
- A.
The relation of earnings to insurance provision assures the insured that complete coverage is being provided.
- B.
The relation of earnings to insurance provision avoids overinsurance.
- C.
The relation of earnings to insurance provision ensures overinsurance.
- D.
The relation of earnings to insurance provision protects the insurer from overcompensating an undeserving benefit recipient.
Correct Answer
B. The relation of earnings to insurance provision avoids overinsurance.Explanation
The goal of the relation of earnings to insurance provision is to avoid overinsurance.Rate this question:
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- 27.
Acme Insurance and Apogee Insurance agree to offer different premiumrates for persons of equal risk within a particular class. They also agreeto limit benefits paid to insureds within this class if the insureds live incertain counties of North Carolina. What are Acme and Apogee engagingin?
- A.
acceptable marketing and underwriting practices
- B.
unfair and prohibited business practices
- C.
insurance fraud
- D.
false advertising
Correct Answer
B. unfair and prohibited business practicesExplanation
Acme and Apogee are agreeing to an unreasonable restraint of trade in the insurance business of North Carolina.
Furthermore, they are engaging in unfair discrimination by charging persons of the same class and substantially
equal risk different premium rates and by paying different benefits to persons in this class.Rate this question:
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- 28.
Best Insurance Company is incorporated in Canada and just applied fora license to transact insurance in North Carolina. Which type of insureris Best Insurance Company considered in North Carolina?
- A.
domestic
- B.
foreign
- C.
alien
- D.
limited
Correct Answer
C. alienExplanation
North Carolina classifies insurance companies according to where they were incorporated. An alien company is one
that has been incorporated or organized under the laws of any jurisdiction outside the United States.Rate this question:
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- 29.
What do group short-term disability income plans generally limitcoverage to?
- A.
occupational disabilities
- B.
non-occupational disabilities
- C.
both occupational and non-occupational disabilities
- D.
sickness-related disabilities only
Correct Answer
B. non-occupational disabilitiesExplanation
Non-occupational plans provide disability income coverage only for disabilities not occurring on the job. Group short-term
disability plans are nonoccupational.Rate this question:
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- 30.
Abby, age 66, just purchased an individual health insurance policy. Onwhat basis can the insurer exclude coverage for diabetes, a conditionthat Abby was diagnosed with one year ago?
- A.
The insurer can exclude coverage for up to six months.
- B.
The insurer can exclude coverage for up to one year.
- C.
The insurer may not exclude coverage for Abby's preexisting
- D.
The insurer may limit coverage only if Abby's pre-existing condition was specifically defined in the policy.
Correct Answer
D. The insurer may limit coverage only if Abby's pre-existing condition was specifically defined in the policy.Explanation
Individual or family health insurance policies issued to individuals over age 65 may limit coverage only for preexisting
conditions that are defined in the policy.Rate this question:
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- 31.
How long from contract signing and issue does an insurance companyhave to discover and void an insurance policy due to fraud?
- A.
6 months
- B.
12 months
- C.
18 months
- D.
24 months
Correct Answer
D. 24 monthsExplanation
The time during which an insurer can void an insurance company on the basis of fraud is typically limited to two years
from the date the contract was signed and issued.Rate this question:
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- 32.
All of the following entities mandate the size of a group health insuranceplan EXCEPT:
- A.
the state's attorney general
- B.
the IRS
- C.
the group's home state
- D.
the insurer underwriting the plan
Correct Answer
A. the state's attorney generalExplanation
The IRS, the state insurance office, and the insurer all have a say in the qualifying size of a group plan. The state's
attorney general is not involved.Rate this question:
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- 33.
To encourage employer-provided health-care coverage, the federal government has enacted laws that provide new and innovative ways to finance the costs of medical care. These methods include all of the following EXCEPT:
- A.
health savings accounts (HSAs)
- B.
medical savings accounts (MSAs)
- C.
individual retirement accounts (IRAs)
- D.
flexible spending accounts (FSAs)
Correct Answer
C. individual retirement accounts (IRAs)Explanation
Individual retirement accounts are tax-advantaged retirement savings accounts and not among the ways to finance
the costs of medical care.Rate this question:
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- 34.
If a group health insurance policy terminates, an employee can elect to continue coverage provided he or she has been insured under the plan for how long before it terminates?
- A.
3 months
- B.
6 months
- C.
9 months
- D.
None of the above
Correct Answer
D. None of the aboveExplanation
Typically, under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in the United States, an employee can elect to continue coverage if they have been insured under the plan for 12 months before it terminates. Therefore, none of the options provided (3 months, 6 months, 9 months) are correct.Rate this question:
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- 35.
What do the provisions "other insurance with this insurer" and "other insurance with other insurer(s)" exemplify in insurance policies?
- A.
The relation-of-earnings to insurance provision
- B.
The change of occupation provision
- C.
The misstatement of age provision
- D.
Coordination of benefits
Correct Answer
D. Coordination of benefitsExplanation
These provisions ensure that the insured does not profit from any one policy. Health insurance policies are designed to return the insured to the position he or she was in before a covered loss. They are not intended to provide benefits that exceed the insured's loss.Rate this question:
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- 36.
An insurer intends to terminate the group health plan of ABC Company.Generally, how much advance notice is required before the termination?
- A.
30 days
- B.
45 days
- C.
60 days
- D.
90 days
Correct Answer
D. 90 daysExplanation
In general, insurers must notify the employer of their intent to discontinue a group health plan at least 90 days before
terminating the plan.Rate this question:
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- 37.
Which of the following is NOT an unfair claims settlement practice ifcommitted by an insurance company in North Carolina?
- A.
failing to promptly acknowledge communications about claims
- B.
failing to promptly settle a claim for which liability is uncertain
- C.
offering to settle claims for less than due to encourage litigation
- D.
raising policy defenses to reduce a claim
Correct Answer
B. failing to promptly settle a claim for which liability is uncertainExplanation
An insurer is not obligated to settle a claim for which it is not clearly liable.Rate this question:
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- 38.
Joshua's major medical policy requires him to pay $15 every time hegoes to see his doctor. What is this payment called?
- A.
the deductible
- B.
the policy's out-of-pocket maximum
- C.
the doctor visit limit
- D.
the co-payment
Correct Answer
D. the co-paymentExplanation
A co-payment is a fixed fee that insureds pay for their use of specific medical services covered by the plan.Rate this question:
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- 39.
Insurers can sell both qualified and non-qualified LTC policies. What canthose who buy qualified policies do?
- A.
buy additional benefits unavailable to those who buy non-qualified policies
- B.
exclude benefits from tax-qualified long-term care insurance policies from the recipient's income with no limits
- C.
deduct their premiums from their state income taxes
- D.
deduct their premium payments from their federal income taxes within certain specified limits
Correct Answer
D. deduct their premium payments from their federal income taxes within certain specified limitsExplanation
Benefit recipients can exclude benefits from tax-qualified long-term care insurance policies from their income within
certain specified limits.Rate this question:
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- 40.
Country Insurers issued a noncancelable individual disability incomepolicy to Paul, a doctor. The amount of benefits that Country Insurerswill pay is based on a percentage of Paul's income. In this case, CountryInsurers is using which approach to paying benefits?
- A.
flat-rate approach
- B.
income-formula approach
- C.
percentage limitation approach
- D.
specified benefit approach
Correct Answer
B. income-formula approachExplanation
An individual disability income policy that ties its benefit to some percentage of the insured's earnings is using an
income-formula approach to providing benefits.Rate this question:
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- 41.
What are the premiums that Allen pays for his individually ownedmedical expense insurance?
- A.
A business expense
- B.
a personal expense
- C.
a medical expense
- D.
a necessary expense
Correct Answer
B. a personal expenseExplanation
Allen's medical expense policy is personally owned, which makes the premiums a personal expense.Rate this question:
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- 42.
Greg's basic hospital plan provides for hospital room and board for amaximum of 30 days with a maximum benefit of $3,000. If Greg also hada supplementary major medical policy, what would that supplementaryplan cover?
- A.
hospital room and board beginning on the 31st day and costs above $3,000
- B.
hospital room and board and costs less than $3,000
- C.
hospital room and board beginning on the 30th day
- D.
hospital room and board beginning on the 15th day and costs above $6,000
Correct Answer
A. hospital room and board beginning on the 31st day and costs above $3,000Explanation
If Greg supplements his basic hospital plan with a supplementary major medical policy, the supplementary plan would
cover hospital room and board beginning on the 31st day and costs above $3,000.Rate this question:
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- 43.
Which statement about health insurance plans for business is NOTcorrect?
- A.
Business health insurance plans provide a number of benefits for the employers who offer them.
- B.
Business health insurance only benefits business owners.
- C.
A benefit of business health insurance is the plan owner's ability to receive favorable tax treatment.
- D.
The tax treatment of business health insurance contracts varies, based on the type of contract.
Correct Answer
B. Business health insurance only benefits business owners.Explanation
A benefit of business health insurance is the plan owner's ability to receive favorable tax treatment.Rate this question:
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- 44.
Which of the following can be used either to limit or expand coverage byadding optional benefits?
- A.
a nonrenewable (cancelable or term) policy
- B.
a conditionally renewable policy
- C.
a guaranteed renewable policy
- D.
a health insurance policy rider
Correct Answer
D. a health insurance policy riderExplanation
A rider is an attachment to and is part of a policy. It can be used either to limit the coverage the insured has or to
expand it by adding optional benefits.Rate this question:
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- 45.
Abby received $15,000 of benefits this year under her group HMO plan.Which of the following statements is correct?
- A.
She is not required to include any part of the benefits in her income.
- B.
She must include part of the benefits in her income.
- C.
She must include all of the benefits in her income.
- D.
She must include the benefits in her income to the extent they exceed a certain percentage of her adjusted gross income.
Correct Answer
A. She is not required to include any part of the benefits in her income.Explanation
Reimbursements an insured receives under a group medical expense insurance indemnity plan for covered expenses
are not taxable to the insured. Likewise, the insured is not taxed for health-care services rendered through a group
managed care plan or accidental death and dismemberment plan.Rate this question:
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- 46.
Sara just purchased a disability income policy and is reading the fineprint. Assuming she meets the policy's definition of disability, in whichof the following scenarios will coverage under her policy apply?
- A.
Her previously diagnosed muscular dystrophy becomes debilitating.
- B.
Her alcoholism renders her chronically immobile.
- C.
She is severely injured while making deliveries at her job.
- D.
In a freak accident, she is struck by lightning and is paralyzed.
Correct Answer
D. In a freak accident, she is struck by lightning and is paralyzed.Explanation
Pre-existing conditions, alcoholism and drug addiction, and injuries covered by workers' compensation are typically
excluded from coverage under disability income policies.Rate this question:
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- 47.
In the case of an insurer that employs agents in the field, which of thefollowing has primary responsibility for delivering a new policy to thepolicyholder?
- A.
insurance company
- B.
agency for which the agent works
- C.
agent
- D.
Department of Insurance
Correct Answer
C. agentExplanation
At the end of the underwriting process, the insurer sends the issued policy to the agent, who then delivers the policy
to the client.Rate this question:
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- 48.
Selene just turned 65 and is overwhelmed by the Medicare program. Sheknows that part of her coverage is provided at no charge and that shewill pay for other parts. Which of the following coverages will she haveto buy through a private insurer?
- A.
Medicare Part A
- B.
Medicare Part B
- C.
Medicare Advantage
- D.
Medicaid
Correct Answer
C. Medicare AdvantageExplanation
Medicare Advantage plans are obtained through private health insurance companies and offer expanded benefits.
They provide all of the Part A Hospital Insurance and Part B Medical Expense coverage. Some may also provide the
Part D Prescription Drug coverage.Rate this question:
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- 49.
Steven is filling out an application for life insurance. The applicationasked whether he had ever had heart problems. Steven intentionallyskips this question even though he had heart surgery three years agobecause he is afraid his application will be denied. What is the term forSteven's failure to give his entire medical history?
- A.
estoppel
- B.
Concealment
- C.
waiver
- D.
breach of contract
Correct Answer
B. ConcealmentExplanation
Concealment is deliberately withholding material facts when applying for insurance. If the concealed facts would have
changed the insurer's decision to offer the insurance policy, then the insurer can void the insurance contract.
ContributionsRate this question:
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- 50.
Contributions are tax deductible and accumulate tax free, with taxfreedistributions for qualified medical expenses under which of thefollowing?
- A.
health savings accounts (HSAs)
- B.
medical savings accounts (MSAs)
- C.
individual retirement accounts (IRAs)
- D.
flexible spending accounts (FSAs)
Correct Answer
A. health savings accounts (HSAs)Explanation
Health savings accounts (HSAs) are tax-exempt accounts that are set up with high deductible, high-cost
insurance policies. Contributions to these accounts are tax deductible and accumulate on a tax-free basis. Distributions to pay for qualified medical expenses are tax free.Rate this question:
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Jun 27, 2024Quiz Edited by
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Aug 17, 2016Quiz Created by
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