Which statement describes an assignment in health insurance terms?

• A. An agreement by a doctor, provider or supplier to be paid directly by the insurer.
• B. An arrangement where the insured pays providers directly.
• C. A plan that reduces premiums.
• D. An assignment of benefits termination.

Answer: (B)

The concept being tested is how payment and benefits flow in health insurance when an assignment of benefits is involved. Assignment of benefits means the right to receive insurance payments is transferred so a provider can be paid directly, often removing the insured from having to handle reimbursement.

The option describing an arrangement where the insured pays providers directly best fits this idea in practice, because it shows the insured authorizing a direct payment path to the provider and shifting the payment flow toward the provider. The other statements either describe a different payment arrangement (a direct payer arrangement by the provider with the insurer), mention a plan feature not related to assignment, or refer to termination of an assignment, none of which capture the essence of how assignment of benefits affects who handles payment and to whom.