Florida Life and Health Insurance License Practice Test

Why are Association Plans that provide health benefits to their members regulated by the state?

1. They are non-profit organizations

2. Members receive dividends

3. They are insured by an authorized insurer

4. They offer investment options to members

The correct answer is: They are insured by an authorized insurer

Association Plans are required to be regulated by the state because they are providing health benefits to their members. This means that they must adhere to state laws and regulations in order to ensure that their members are receiving adequate coverage and protection. Option A is incorrect because non-profit status does not exempt an organization from state regulation. Option B is incorrect because receiving dividends does not inherently make an organization regulated by the state. Option D is incorrect because offering investment options does not have a direct connection to state regulation in the context of providing health benefits. Only option C, being insured by an authorized insurer, directly relates to state regulation of Association Plans.