100% Free AHIP AHM-520 Practice Test Questions and Answers 2026

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Total 215 Questions | Updated On: May 21, 2026

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Question 1

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.....$2,500,000Total liabilities.....$3,600,000Stockholders' equity.....$2,400,000Fairway'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:

A : Fairway-s debt-to-equity ratio is 1.50

B : Fairway relies less than most other healthcare organizations on borrowed funds to cover future and current benefit payments, to pay for ongoing business operations, and to finance growth

C : Both A and B

D : A only

E : B only

F : Neither A nor B

Answer: B

Question 2

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 3

The following statements are about 501(c)(9) trusts. Select the answer choice containing the correct statement:

A : In the event a 501(c)(9) trust is terminated, any funds remaining in the trust revert back to the employer.

B : In order to satisfy Internal Revenue Code (IRC) requirements, membership in a 501(c)(9) trust is mandatory for all employees.

C : Contributions made by an employer to a 501(c)(9) trust are deductible for federal income tax purposes.

D : Typically, a 501(c)(9) trust is controlled solely by the employer that established the trust.

Answer: C

Question 4

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.....$2,500,000Total liabilities.....$3,600,000Stockholders' equity.....$2,400,000Fairway'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 5

The following statements are about the financial risks for health plans in Medicare and Medicaid markets. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

A : One reason that health plans in the Medicare and Medicaid markets experience financial risk is that government regulations determine which services must be provided to Medicare and Medicaid enrollees.

B : Effective use of hospital utilization is the single most likely factor to contribute to the success of a Medicare-contracting health plan.

C : If a Medicare-contracting health plan is a provider-sponsored organization (PSO), it is prohibited from sharing financial risk with its providers.

D : Typically, providers are more reluctant to accept financial risk in connection with providing services to the Medicaid population than with providing services to the Medicare population.

Answer: C

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Total 215 Questions | Updated On: May 21, 2026

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