Arkansas Life and Health Insurance Practice Exam

When it comes to small group health insurance, what is a class defined as?

1. All employees of large companies

2. A type of individual health plan

3. A distinct grouping of small employers as shown on an insurer's records

4. Any group policy with fewer than 50 participants

The correct answer is: All employees of large companies

In small group health insurance, a class is defined as all employees of large companies. This is because in the small group market, a class is typically made up of employees of small employers, rather than employees of large companies. Classes are used to categorize individuals within a group to assess risk and determine insurance premiums. Options B, C, and D are incorrect: - Option B is wrong because a class in small group health insurance is not a type of individual health plan. - Option C is incorrect because a class does not refer to a distinct grouping of small employers as shown on an insurer's records. - Option D is inaccurate as a class is not any group policy with fewer than 50 participants.