State RegulationsOH specificDifficulty 2/5
A human resources manager in Columbus compares two health arrangements: Plan X simply reimburses providers after employees receive care, while Plan Y both arranges medical services through an organized provider system and pays for that care. Which plan is operating as a health insuring corporation (HIC)?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The defining characteristic of an HIC under Ohio Revised Code Chapter 1751 is the combination of health care delivery with health care financing: the entity arranges services through an organized provider network and funds them through prepaid premiums. Plan Y performs both functions and is therefore functioning as an HIC, while Plan X performs only the financing function typical of a traditional indemnity insurer. The Ohio Department of Insurance supervises HICs on this basis.
Why the other options are wrong
- A) Reimbursement after care describes the indemnity model; the HIC model is defined by arranging care, not merely paying for it afterward.
- B) Ohio law expressly authorizes private HICs to combine delivery and financing; no governmental monopoly exists.
- D) The two plans differ fundamentally — Plan X only finances care, while Plan Y also delivers or arranges it — so they cannot both be HICs.
Memory hook
If the plan both arranges AND pays for the care, it is an HIC.