Types of health policies practice questions (Massachusetts A&H exam)
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Section I of the Massachusetts Accident, Health or Sickness Producer exam, "Types of Policies," has 16 scored questions, the largest general section. [1] The outline lists disability income (individual, business overhead expense, disability buyout, group and key employee), AD&D, medical expense coverage (basic, major medical, HMOs, PPOs, POS plans, FSAs, high deductible plans with HSAs, and HRAs), Medicare supplement, group insurance and COBRA, long-term care, and other policies such as dental, vision, cancer, critical illness, hospital indemnity, short-term medical and accident. [1] This page covers these using the Massachusetts Division of Insurance's guides and the IRS, with 10 practice questions.
Medical plan types, as the Division describes them
- HMO: "HMOs have a network of providers that you must use in order to be covered and not pay additional costs." [2]
- PPO: "PPOs have a network of preferred providers, but they also cover services for out-of-network providers." [2]
- POS: "POSs (Point-of-Service Plans) are all managed care plans that use a network of providers." [2]
- Indemnity: "These plans may only cover a fixed percentage of any covered cost." [2]
- Managed care: a plan is a managed care plan "if it has a network of providers." [2]
Disability income
- Disability income insurance "provides replacement income to an insured in the event a covered illness or accident results in a disability." [3]
- Short-term coverage typically replaces part of salary for three to six months. Long-term coverage generally begins six months after the disability and can last years or until retirement age. [3]
- Group coverage is typically offered through an employer. Individual coverage is medically underwritten and usually issued on a guaranteed renewable basis. [3]
Practice questions
1. Which plan type requires you to use its network to be covered without extra cost?
A. PPO
B. HMO
C. Indemnity
D. Major medical
Answer: B. [2]
2. Which plan type has preferred providers but also covers out-of-network care?
Answer: PPO. [2]
3. What makes a health plan a managed care plan, according to the Division?
Answer: Having a network of providers. [2]
4. How long does short-term disability coverage typically replace salary?
Answer: Three to six months. [3]
5. When does long-term disability coverage generally begin?
Answer: Six months after the disability. It can last years or even until retirement age. [3]
6. Why might someone be turned down for individual disability income coverage?
Answer: It is medically underwritten, so applicants may be denied based on risk. [3]
7. To contribute to an HSA, what coverage must you have?
Answer: A high deductible health plan (HDHP). [4]
8. Are distributions from an HSA taxed when used for qualified medical expenses?
Answer: No. [4]
9. Who can contribute to an HRA?
Answer: Only the employer. "An HRA must receive contributions from the employer only." [4]
10. What is a Medigap (Medicare supplement) plan?
Answer: Coverage that provides extra benefits beyond Original Medicare. The Massachusetts SHINE guide notes Medigap plans do not include prescription drug coverage. [5]
HSA tax rules and 2026 limits
IRS Publication 969 describes an HSA as a tax-exempt trust or custodial account set up with a qualified HSA trustee. Contributions other than employer contributions are deductible even if you do not itemize, and employer contributions are not included in income. [4] For 2026, the IRS lets you contribute up to $4,400 with self-only HDHP coverage and up to $8,750 with family HDHP coverage. [4]
Study tips
- Learn the network rule for each plan: HMO stays in network, PPO can go out of network, indemnity pays a fixed percentage.
- Disability timing: short-term three to six months, long-term starting around six months.
Practice more with the free Massachusetts Accident and Health practice test.
Prep Retention is independent and is not affiliated with Pearson VUE or the state.
Sources
- Pearson VUE, Massachusetts content outlines 122301 (effective July 22, 2026): https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/122301.pdf
- Massachusetts Division of Insurance, Consumer Guide to Understanding Health Insurance: https://www.mass.gov/info-details/consumer-guide-to-understanding-health-insurance
- Massachusetts Division of Insurance, Disability Insurance: https://www.mass.gov/info-details/disability-insurance
- IRS, Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans: https://www.irs.gov/publications/p969
- Massachusetts SHINE Program, 2026 Medicare Beginner's Guide for Massachusetts Consumers: https://www.mass.gov/doc/2026-massachusetts-consumer-guide-to-medicare/download