CEC ACA & Marketplace Fundamentals 5 — Questions and Answers
Question 1: Under the ACA's guaranteed issue requirement, insurers in the individual Marketplace must:
- Accept all applicants regardless of health status during open or special enrollment periods (Correct answer)
- Only accept applicants who pass a health screening
- Charge higher premiums to applicants with pre-existing conditions
- Limit enrollment to applicants under age 60
Correct answer: Accept all applicants regardless of health status during open or special enrollment periods
Guaranteed issue prohibits Marketplace insurers from denying coverage or charging more based on health status during enrollment periods.
Question 2: What is the role of the risk corridor program established under the ACA?
- To limit insurer losses or gains during the first years of Marketplace operation (Correct answer)
- To set premium rates for Bronze plans only
- To fund Navigator programs in underserved areas
- To manage state Medicaid expansion budgets
Correct answer: To limit insurer losses or gains during the first years of Marketplace operation
Risk corridors were a temporary program designed to stabilize insurer profits/losses in the first three years of ACA Marketplace operation (2014-2016).
Question 3: A consumer enrolling on November 20 during Open Enrollment selects a plan. When does their coverage begin if no earlier start date applies?
- December 1 of that year
- January 1 of the following year (Correct answer)
- November 30 of that year
- February 1 of the following year
Correct answer: January 1 of the following year
Enrollments completed between December 16 and January 15 have a February 1 effective date, but a November 20 enrollment results in a January 1 effective date.
Question 4: Which of the following is a permissible rating factor that insurers may use to vary premiums in ACA Marketplace plans?
- Gender
- Health status or pre-existing conditions
- Age (within a 3:1 ratio limit) (Correct answer)
- Occupation
Correct answer: Age (within a 3:1 ratio limit)
The ACA allows insurers to vary premiums based on age (up to 3:1 ratio), tobacco use, family size, and geographic area, but prohibits gender and health status rating.
Question 5: What income threshold (as a percentage of FPL) must an individual be at or above to be eligible for Marketplace premium tax credits rather than Medicaid?
- 100% FPL in all states
- 100% FPL in non-expansion states; 138% FPL in expansion states (Correct answer)
- 133% FPL in all states
- 200% FPL in all states
Correct answer: 100% FPL in non-expansion states; 138% FPL in expansion states
In Medicaid expansion states, APTC eligibility starts at 138% FPL; in non-expansion states, it starts at 100% FPL because those below 138% have no Medicaid option.
Question 6: A Certified Application Counselor (CAC) differs from a Navigator primarily in that CACs:
- Can charge consumers a fee for enrollment assistance
- Are designated and trained by certified application counselor organizations such as hospitals and health centers (Correct answer)
- Are federally funded through Marketplace grants
- Can recommend specific insurance plans for a commission
Correct answer: Are designated and trained by certified application counselor organizations such as hospitals and health centers
CACs are designated by CMS-approved organizations (like FQHCs or hospitals) and trained to help consumers enroll, but they cannot charge fees or accept insurer compensation.
Question 7: Under the ACA's individual mandate (before the penalty was reduced to $0 in 2019), what was the primary enforcement mechanism?
- Criminal prosecution by the Department of Justice
- A shared responsibility payment collected through the federal tax return (Correct answer)
- Loss of Medicaid eligibility
- Denial of Marketplace enrollment in future years
Correct answer: A shared responsibility payment collected through the federal tax return
The individual mandate was enforced via a 'shared responsibility payment' (tax penalty) assessed on the federal income tax return for those without MEC.
CEC ACA & Marketplace Fundamentals 5
Under the ACA's guaranteed issue requirement, insurers in the individual Marketplace must: