SOFA-CFE · Question #21
What bears all of the insurance risk, and there is no possibility of loss or liability to the administrator caused by claims incurred related to the plan.
The correct answer is B. Uninsured Accident and Health Plans. Uninsured Accident and Health Plans (B) are self-funded arrangements where the employer (or plan sponsor) bears all insurance risk directly - no insurance carrier is involved, so there is zero possibility of loss or liability to the plan administrator stemming from claims. The…
Question
What bears all of the insurance risk, and there is no possibility of loss or liability to the administrator caused by claims incurred related to the plan.
Options
- AUninsured Investment Plans
- BUninsured Accident and Health Plans
- CReal state income Plans
- DInvestment Write-off Plans
How the community answered
(50 responses)- A6% (3)
- B78% (39)
- C4% (2)
- D12% (6)
Explanation
Uninsured Accident and Health Plans (B) are self-funded arrangements where the employer (or plan sponsor) bears all insurance risk directly - no insurance carrier is involved, so there is zero possibility of loss or liability to the plan administrator stemming from claims. The administrator simply processes claims on behalf of the plan sponsor, who pays them out of its own funds.
A (Uninsured Investment Plans) and D (Investment Write-off Plans) are fabricated terms - these are not recognized categories in benefit plan administration, making them easy eliminations. C (Real Estate Income Plans) refers to a real estate investment concept entirely unrelated to health and accident insurance risk.
Memory tip: Think "A&H = All on the Holder." In Uninsured Accident and Health Plans, the plan holder (employer/sponsor) carries all the risk - "uninsured" signals no insurer to absorb losses.
Community Discussion
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