Which statement about the major medical plan's deductible carryover provision is accurate?

• A. It applies to expenses incurred in the first three months of the plan year
• B. It resets the deductible for the new plan year
• C. It relates to coinsurance amounts only
• D. It allows expenses incurred in the last three months of the plan year to be counted toward the next year's deductible

Answer: (D)

The idea being tested is how a deductible carryover works. This provision lets expenses you incur in the last three months of the plan year, which count toward meeting that year’s deductible, be carried forward to help satisfy the next year’s deductible. In practice, you don’t start the new year with a clean slate; any eligible expenses from the end of the year reduce what you’ll still need to pay toward the next year’s deductible.

For example, if the deductible is $1,500 and you have $1,200 in eligible deductible expenses in the last three months, those $1,200 are carried into the next plan year. At the start of the new year, you’d have $300 remaining to meet the deductible, rather than $1,500. This carryover does not apply to coinsurance amounts and is governed by plan-specific rules regarding timing and limits.

The other choices don’t fit because they describe resetting the deductible, applying to coinsurance only, or focusing on expenses in the early part of the year, which are not what the carryover provision does.