Life & Health Insurance Exam Life & Health Insurance Health Insurance Fundamentals 3 — Questions and Answers
Question 1: Under the ACA, what is the required waiting period before an employer-sponsored health plan must cover a new employee?
- No waiting period is allowed
- Up to 30 days
- Up to 60 days
- Up to 90 days (Correct answer)
Correct answer: Up to 90 days
The ACA limits employer waiting periods for health plan enrollment to a maximum of 90 days.
Question 2: Which of the following is NOT a qualifying life event that triggers a special enrollment period?
- Marriage
- Birth of a child
- Voluntary termination of prior coverage (Correct answer)
- Loss of other health coverage
Correct answer: Voluntary termination of prior coverage
Voluntarily dropping prior coverage does not qualify as a special enrollment trigger; only involuntary loss of coverage qualifies.
Question 3: A Point-of-Service (POS) plan combines features of which two plan types?
- PPO and indemnity
- HMO and PPO (Correct answer)
- HMO and HSA
- EPO and indemnity
Correct answer: HMO and PPO
A POS plan blends HMO structure (PCP gatekeeper, lower in-network costs) with PPO flexibility (option to use out-of-network providers at higher cost).
Question 4: What is the grace period for an individual health insurance policy under most state laws?
- 7 days
- 10 days
- 31 days (Correct answer)
- 60 days
Correct answer: 31 days
Most states require at least a 31-day grace period for individual health insurance policies, during which the policy remains in force even if a premium is overdue.
Question 5: Which federal law requires group health plans covering 20 or more employees to offer continuation coverage to terminated employees?
- ERISA
- HIPAA
- COBRA (Correct answer)
- FMLA
Correct answer: COBRA
COBRA (Consolidated Omnibus Budget Reconciliation Act) mandates continuation of group health coverage for up to 18 months after qualifying events such as job loss.
Question 6: A health insurance policy's 'elimination period' most closely resembles which other policy provision?
- Grace period
- Deductible
- Waiting period / deductible period (Correct answer)
- Coinsurance clause
Correct answer: Waiting period / deductible period
An elimination period is a time-based deductible — a set number of days that must pass before benefits begin, common in disability and LTC policies.
Question 7: Under the ACA's essential health benefits requirement, which of the following services must all individual and small-group plans cover?
- Cosmetic surgery
- Vision correction for adults
- Mental health and substance use disorder services (Correct answer)
- Private duty nursing
Correct answer: Mental health and substance use disorder services
Mental health and substance use disorder services are one of the ten essential health benefit categories that ACA-compliant individual and small-group plans must cover.
Life & Health Insurance Exam Life & Health Insurance Health Insurance Fundamentals 3
Under the ACA, what is the required waiting period before an employer-sponsored health plan must cover a new employee?