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HS 311 study materials
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HS 311 practice questions

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Question 1Foundations of Health Insurance

Under a typical major medical expense policy, which cost-sharing feature requires the insured to pay a specified amount out of pocket before the insurer begins paying covered benefits?

  1. The premium
  2. The out-of-pocket maximum
  3. The coinsurance percentage
  4. The deductible Correct answer.

Explanation

The deductible is the initial amount the insured must pay for covered services each benefit period before the insurer shares costs. Coinsurance applies after the deductible is satisfied, the out-of-pocket maximum caps total member spending, and the premium is the amount paid to maintain coverage.

Question 2Foundations of Health Insurance

A policyholder has a $2,000 deductible, 20% coinsurance, and a $6,000 out-of-pocket maximum. After meeting the deductible, the member incurs a $10,000 covered claim. Ignoring any copays, what is the member's total out-of-pocket responsibility for the year?

  1. $4,000 Correct answer.
  2. $2,000
  3. $6,000
  4. $8,000

Explanation

The member first pays the $2,000 deductible, leaving $8,000 of the claim subject to coinsurance. Twenty percent of $8,000 is $1,600, so total member spending is $3,600, which is below the $6,000 maximum and therefore fully owed.

Question 3Foundations of Health Insurance

Which statement best describes the purpose of an out-of-pocket maximum in a health insurance plan?

  1. It sets the maximum premium increase allowed at renewal
  2. It defines the highest allowable charge a provider may bill
  3. It caps the member's cost sharing for covered in-network services in a plan year Correct answer.
  4. It limits the total covered expenses an insurer will pay in a year

Explanation

The out-of-pocket maximum protects the member by capping the cumulative cost sharing (deductible, copays, and coinsurance) for covered in-network care in a plan year. Once reached, the plan generally pays 100% of covered in-network benefits.

Question 4Foundations of Health Insurance

An enrollee visits an in-network primary care physician and pays a fixed $30 at the time of service while the plan pays the remainder. This arrangement is best described as which cost-sharing mechanism?

  1. A deductible
  2. A premium
  3. Coinsurance
  4. A copayment Correct answer.

Explanation

A copayment is a fixed dollar amount the member pays for a specified service at the point of care. Coinsurance, by contrast, is a percentage of the allowed charge rather than a flat sum.

Question 5Foundations of Health Insurance

Which entity typically bears the insurance risk in a fully insured group health plan?

  1. The third-party administrator
  2. The insurance carrier Correct answer.
  3. The employees collectively
  4. The employer sponsoring the plan

Explanation

In a fully insured arrangement, the carrier accepts the financial risk of paying claims in exchange for premiums. The employer merely purchases the coverage and does not retain claims risk.

Question 6Foundations of Health Insurance

In a self-funded group health plan, what is the primary role of a third-party administrator (TPA)?

  1. Processing claims and administering benefits on behalf of the plan sponsor Correct answer.
  2. Underwriting and assuming the plan's claims risk
  3. Selling the plan to individual consumers
  4. Regulating the solvency of the plan sponsor

Explanation

A TPA performs administrative functions such as claims adjudication, network access, and member services for a self-funded plan. The plan sponsor, not the TPA, retains the financial risk for claims.

Question 7Foundations of Health Insurance

A stop-loss policy purchased by a self-funded employer that reimburses the plan once total claims for the year exceed a predetermined level is which type of coverage?

  1. Specific stop-loss
  2. Aggregate stop-loss Correct answer.
  3. A health reimbursement arrangement
  4. Coinsurance

Explanation

Aggregate stop-loss protects the plan against unusually high total claims across the covered population in a period. Specific stop-loss instead attaches to a single claimant's large individual claim.

Question 8Foundations of Health Insurance

Which law established national minimum standards for group health plans covering portability, creditable coverage, and nondiscrimination based on health status?

  1. The Consolidated Omnibus Budget Reconciliation Act (COBRA)
  2. The Health Insurance Portability and Accountability Act (HIPAA) Correct answer.
  3. The Affordable Care Act (ACA)
  4. The Employee Retirement Income Security Act (ERISA)

Explanation

HIPAA's portability provisions set national standards limiting preexisting condition exclusions and prohibiting discrimination based on health status in group plans. ERISA governs fiduciary and reporting duties, COBRA governs continuation coverage, and the ACA expanded market reforms.

Question 9Foundations of Health Insurance

Which federal law gives eligible employees and dependents the right to continue group health coverage for a limited period after a qualifying event such as termination of employment?

  1. HIPAA
  2. The Mental Health Parity and Addiction Equity Act
  3. ERISA
  4. COBRA Correct answer.

Explanation

COBRA requires covered group health plans to offer continuation coverage to qualified beneficiaries following certain events, with the individual typically paying the full premium. HIPAA addresses portability, ERISA addresses fiduciary duties, and parity law addresses benefit limitations.

Question 10Foundations of Health Insurance

Under the Affordable Care Act, which practice is prohibited for individual and small group health plans in the nongrandfathered market?

  1. Charging higher premiums to older enrollees within a permitted age band
  2. Denying coverage or raising rates based on preexisting conditions Correct answer.
  3. Charging different rates based on geographic rating areas
  4. Varying premiums by tobacco use within permitted limits

Explanation

The ACA prohibits preexisting condition exclusions and health-status underwriting in the individual and small group markets. Age, tobacco use, and geography remain permitted rating factors within federally defined limits.

Question 11Foundations of Health Insurance

An individual enrolls in a plan during the annual open enrollment period with an effective date of January 1. Which term describes the period during which the person may enroll without a qualifying life event?

  1. A probationary period
  2. An open enrollment period Correct answer.
  3. A waiting period
  4. A special enrollment period

Explanation

Open enrollment is the designated annual window when eligible individuals may enroll, change, or drop coverage without needing a triggering event. Special enrollment periods are event-driven, and waiting periods delay coverage after enrollment.

Question 12Foundations of Health Insurance

An employee loses group coverage when leaving a job and enrolls in an individual marketplace plan within 60 days. Which term describes this enrollment opportunity?

  1. A preexisting condition exclusion period
  2. A special enrollment period Correct answer.
  3. A guaranteed renewable period
  4. Open enrollment

Explanation

Loss of minimum essential coverage is a qualifying life event that triggers a special enrollment period, allowing enrollment outside the annual open enrollment window. The individual generally has a limited window to act after the event.

Question 13Foundations of Health Insurance

Which of the following best describes a qualifying life event for purposes of a special enrollment period?

  1. A routine annual physical examination
  2. A change in the member's preferred pharmacy
  3. A change in the member's annual income
  4. A marriage, birth, or adoption that changes dependent status Correct answer.

Explanation

Events such as marriage, birth, adoption, and loss of other coverage create special enrollment rights because they change the individual's coverage needs. Income changes and routine care do not by themselves trigger enrollment rights.

Question 14Foundations of Health Insurance

In a health insurance context, what does the term 'network' refer to?

  1. The set of providers and facilities that have contracted with a plan to deliver services at negotiated rates Correct answer.
  2. The collection of claims filed during a benefit period
  3. The regulatory body that licenses insurers in a state
  4. The group of employers that purchase coverage from the same carrier

Explanation

A provider network consists of physicians, hospitals, and other providers that contract with the carrier to accept negotiated reimbursement rates. Using in-network providers typically lowers member cost sharing.

Question 15Foundations of Health Insurance

An enrollee in an HMO receives care from an out-of-network specialist without prior authorization and without an emergency. How does a typical HMO structure treat this claim?

  1. It pays the claim at the in-network rate
  2. It generally denies payment except in emergencies or with authorization Correct answer.
  3. It pays the claim at the Medicare rate
  4. It reimburses the member at 100% of billed charges

Explanation

HMOs generally require members to use network providers and obtain referrals or authorizations, so non-emergency out-of-network care is typically not covered. Emergency services are protected and must be covered regardless of network status.

Question 16Foundations of Health Insurance

Which plan type generally allows members to see any provider but pays a higher share of costs when using non-network providers?

  1. A point-of-service HMO with no out-of-network benefit
  2. A preferred provider organization (PPO) Correct answer.
  3. A closed-panel HMO
  4. An exclusive provider organization (EPO)

Explanation

A PPO offers a network of preferred providers with lower cost sharing but still provides benefits for out-of-network care at a reduced level. Closed-panel HMOs and EPOs generally provide no non-emergency out-of-network benefits.

Question 17Foundations of Health Insurance

Which statement accurately describes the difference between an exclusive provider organization (EPO) and a health maintenance organization (HMO)?

  1. An EPO generally does not require referrals to see specialists, while an HMO often does Correct answer.
  2. An EPO requires a primary care gatekeeper, while an HMO does not
  3. An EPO is a government program, while an HMO is commercial
  4. An EPO covers out-of-network care at in-network rates, while an HMO does not

Explanation

EPOs typically provide network-only benefits but generally do not require a primary care physician referral to see specialists. HMOs commonly use a gatekeeper model requiring referrals for specialist care.

Question 18Foundations of Health Insurance

A high-deductible health plan (HDHP) paired with a health savings account (HSA) requires which of the following for the HSA to be funded with pre-tax contributions?

  1. The member must be covered by a qualifying HDHP and have no disqualifying coverage Correct answer.
  2. The member must be enrolled in Medicare
  3. The member must have an employer-sponsored flexible spending account
  4. The member must have a household income below the subsidy threshold

Explanation

HSA eligibility requires coverage under a qualifying HDHP, no disqualifying coverage such as Medicare or a general-purpose FSA, and no dependency status on another's return. Pre-tax contributions are permitted only while eligibility is maintained.

Question 19Foundations of Health Insurance

Which feature distinguishes a health reimbursement arrangement (HRA) from a health savings account (HSA)?

  1. An HRA is funded solely by the employer, while an HSA can be funded by the member or employer Correct answer.
  2. An HRA is always portable when the employee changes jobs
  3. An HRA allows tax-free withdrawals for any purpose at any age
  4. An HRA requires a high-deductible health plan, while an HSA does not

Explanation

HRAs are employer-funded account-based arrangements, and funds generally are not portable when employment ends. HSAs are member-owned, portable, and require qualifying HDHP coverage.

Question 20Foundations of Health Insurance

Which of the following is a core function of utilization management in a health plan?

  1. Reviewing the medical necessity and appropriateness of services before or after delivery Correct answer.
  2. Determining the plan's network of contracted providers
  3. Calculating the member's coinsurance percentage
  4. Setting the premium rate for the coming year

Explanation

Utilization management evaluates whether requested services are medically necessary and appropriate, often through prior authorization, concurrent review, or retrospective review. It is distinct from pricing, network contracting, and benefit design.

Question 21Foundations of Health Insurance

A plan requires the member to obtain approval from the carrier before a planned inpatient surgery. This requirement is best described as which utilization management technique?

  1. Retrospective review
  2. Prior authorization Correct answer.
  3. Case management
  4. Concurrent review

Explanation

Prior authorization, also called precertification, requires approval before a service is delivered so the plan can confirm medical necessity in advance. Concurrent review occurs during an ongoing stay, and retrospective review occurs after care.

Question 22Foundations of Health Insurance

Which term refers to the list of prescription drugs covered by a health plan and the cost tiers assigned to them?

  1. The deductible schedule
  2. The network
  3. The formulary Correct answer.
  4. The benefit summary

Explanation

A formulary is the plan's list of covered medications, often organized into tiers that determine member cost sharing. It is distinct from provider networks and from benefit summaries.

Question 23Foundations of Health Insurance

Which statement best explains why insurers use medical underwriting in the individual market where permitted?

  1. To set premiums that reflect the expected claims cost of the applicant Correct answer.
  2. To calculate the member's out-of-pocket maximum
  3. To comply with the ACA's guaranteed issue requirement
  4. To determine the provider network available to the applicant

Explanation

Medical underwriting evaluates an applicant's health history to estimate expected claims and price risk accordingly. It is fundamentally incompatible with guaranteed issue rules, which require coverage regardless of health status.

Question 24Foundations of Health Insurance

A group health plan's summary plan description (SPD) primarily serves which purpose?

  1. It records the plan's claims experience for reinsurance
  2. It certifies the insurer's financial solvency
  3. It sets the provider reimbursement rates
  4. It discloses the plan's benefits, rights, and obligations to participants Correct answer.

Explanation

The SPD is an ERISA-required disclosure that explains plan benefits, eligibility, claims procedures, and participant rights in plain language. It is a member-facing document, not a solvency or rate-setting instrument.

Question 25Health Insurance Providers and the Marketplace

Under the ACA market reforms, a health insurance issuer offering individual or small group coverage must guarantee issue and renew coverage regardless of an applicant's health status. Which term best describes this requirement?

  1. Experience rating and medical underwriting
  2. Annual and lifetime dollar limit
  3. Pre-existing condition exclusion period
  4. Guaranteed availability and guaranteed renewability Correct answer.

Explanation

Guaranteed availability requires issuers to accept every applicant in the individual and small group markets, and guaranteed renewability requires them to continue the policy at the enrollee's option. Together these rules eliminate health-status underwriting in those markets.

Question 26Health Insurance Providers and the Marketplace

An individual buys a Marketplace plan during open enrollment. Which statement accurately describes how the premium tax credit is delivered to the insurer?

  1. The federal government pays the advance credit directly to the issuer each month Correct answer.
  2. The issuer absorbs the credit as a charitable discount on the premium
  3. The enrollee pays the full premium and receives a refund only at tax filing
  4. The state Medicaid agency reimburses the issuer after the plan year ends

Explanation

When a consumer elects advance payment of the premium tax credit, the Marketplace estimates the amount and the federal government pays it directly to the issuer each month. The enrollee pays only the remaining share of the premium. The credit is reconciled against actual income when the enrollee files taxes.

Question 27Health Insurance Providers and the Marketplace

A small employer with 40 full-time equivalent employees wants to offer coverage through the SHOP Marketplace. Which statement reflects the SHOP eligibility rule?

  1. Small employers generally may use SHOP, and states may allow employers with up to 100 employees Correct answer.
  2. Only employers with 100 or more employees may use SHOP
  3. SHOP is limited to employers with no more than 50 employees in every state
  4. SHOP is available only to employers that already offer coverage outside the Marketplace

Explanation

SHOP serves small employers, defined federally as those with 50 or fewer full-time equivalent employees, and states have the option to expand eligibility to employers with up to 100 employees. A 40-FTE employer therefore generally qualifies.

Question 28Health Insurance Providers and the Marketplace

Which entity is responsible for operating the eligibility and enrollment functions of a state-based Marketplace?

  1. The health insurance issuers selling plans on the Marketplace
  2. The Centers for Medicare & Medicaid Services exclusively
  3. The Department of Labor
  4. The state or a state-designated entity under federal oversight Correct answer.

Explanation

In a state-based Marketplace, the state or a state-designated entity performs eligibility and enrollment functions, subject to federal certification and oversight. CMS directly operates the federal Marketplace and its functions only where a state has not established its own.

Question 29Health Insurance Providers and the Marketplace

A qualified health plan certified to be offered on a Marketplace must meet which requirement?

  1. It must exclude all preventive services to control premium cost
  2. It must be sold exclusively outside the individual market
  3. It must include a sufficient choice of providers and maintain a network adequacy standard Correct answer.
  4. It must cover only essential health benefits selected by the issuer

Explanation

Qualified health plans must satisfy certification standards, including network adequacy, inclusion of essential health benefits, and compliance with market reforms. Network adequacy ensures enrollees have a sufficient choice of providers.

Question 30Health Insurance Providers and the Marketplace

A consumer earning 150% of the federal poverty level enrolls in a silver Marketplace plan. Which cost-sharing feature is designed to reduce the enrollee's out-of-pocket costs?

  1. Cost-sharing reductions that lower deductibles and copayments Correct answer.
  2. A separate reinsurance payment made to the enrollee
  3. A premium surcharge applied at enrollment
  4. A higher deductible to discourage utilization

Explanation

Cost-sharing reductions are available to eligible enrollees, generally those with income up to 250% of the federal poverty level who enroll in a silver plan. They reduce deductibles, copayments, and coinsurance rather than the premium itself.

Question 31Health Insurance Providers and the Marketplace

Which statement correctly describes the actuarial value tiers used to label Marketplace plans?

  1. Bronze plans cover about 60% of allowed costs, silver about 70%, gold about 80%, and platinum about 90% Correct answer.
  2. Metal tiers measure the size of the provider network rather than cost sharing
  3. All metal tiers cover the same percentage of costs but differ only in premium
  4. Bronze plans cover about 90% of allowed costs, and platinum about 60%

Explanation

Metal tiers are based on actuarial value, the share of covered benefits the plan pays for a standard population. Bronze is roughly 60%, silver 70%, gold 80%, and platinum 90%, with catastrophic plans available to certain eligible individuals.

Question 32Health Insurance Providers and the Marketplace

An issuer wants to sell a catastrophic plan on the individual Marketplace. Which eligibility condition applies?

  1. The enrollee must be a small employer with fewer than 25 employees
  2. The enrollee must be under 30 or have a hardship or affordability exemption Correct answer.
  3. The enrollee must be enrolled in Medicare Part A
  4. The enrollee must have income above 400% of the federal poverty level

Explanation

Catastrophic plans are available in the individual market to people under age 30 and to those who qualify for a hardship or affordability exemption. They have lower premiums but high deductibles and limited cost-sharing reductions.

Question 33Health Insurance Providers and the Marketplace

A consumer with income at 300% of the federal poverty level is offered employer-sponsored coverage that costs 9.2% of household income for self-only coverage. How does this affect eligibility for Marketplace premium tax credits?

  1. The consumer is ineligible only if the employer plan has a deductible above $1,500
  2. The consumer is ineligible for premium tax credits because affordable employer coverage was offered Correct answer.
  3. The consumer remains eligible because the employer plan is not a bronze metal tier
  4. The consumer remains eligible because employer coverage never affects credit eligibility

Explanation

An offer of affordable employer-sponsored coverage that provides minimum value disqualifies the employee from premium tax credits. Affordability is generally measured against the required employee contribution for self-only coverage relative to household income, so a 9.2% contribution at this income level exceeds the applicable threshold.

Question 34Health Insurance Providers and the Marketplace

A Marketplace enrollee experiences a significant income increase during the year but does not update the application. What is the likely consequence at tax filing?

  1. The issuer must refund the difference to the enrollee
  2. The enrollee keeps all advance credit received with no adjustment
  3. The Marketplace automatically cancels the policy retroactively
  4. Excess advance premium tax credit must be repaid, subject to applicable repayment limits Correct answer.

Explanation

Advance premium tax credits are reconciled against actual household income on the tax return. If income rose and the advance credit exceeded the allowed amount, the excess is repaid, subject to repayment caps for those below 400% of the federal poverty level.

Question 35Health Insurance Providers and the Marketplace

An issuer files a proposed rate increase for a qualified health plan. Which review process applies to rate increases meeting the applicable threshold?

  1. Rate review by CMS or an effective state rate review program Correct answer.
  2. Automatic approval without any review
  3. Review conducted only by the issuer's board of directors
  4. Review by the Department of Labor under ERISA

Explanation

The ACA rate review framework requires issuers to justify unreasonable rate increases, and increases above the threshold are reviewed by CMS or by a state with an effective rate review program. The review evaluates the reasonableness of the proposed increase.

Question 36Health Insurance Providers and the Marketplace

An issuer's individual market plan uses a provider network that excludes a major local hospital system. Which Marketplace certification concern does this raise?

  1. Guaranteed renewability
  2. Premium tax credit reconciliation
  3. Actuarial value tier misclassification
  4. Network adequacy, including access to essential community providers and sufficient provider choice Correct answer.

Explanation

Qualified health plans must maintain networks sufficient to ensure access to care without unreasonable delay, including reasonable access to essential community providers. Excluding a major local system may undermine network adequacy and trigger certification review.

Question 37Health Insurance Providers and the Marketplace

A consumer misses the annual open enrollment period but experiences a qualifying life event. What mechanism may allow enrollment in Marketplace coverage outside open enrollment?

  1. A mandatory reopening of open enrollment for all consumers
  2. An extension of the prior plan year's policy by the issuer
  3. Enrollment through the SHOP Marketplace as an individual
  4. A special enrollment period triggered by the qualifying event Correct answer.

Explanation

A qualifying life event, such as marriage, birth, or loss of other coverage, can trigger a special enrollment period during which the consumer may enroll outside the annual open enrollment window. The consumer generally must act within a specified timeframe.

Question 38Health Insurance Providers and the Marketplace

A small employer in a state that has not expanded Medicaid considers offering SHOP coverage. Which statement about SHOP and the small business health care tax credit is accurate?

  1. Eligible small employers may claim the credit for a portion of contributions when purchasing SHOP coverage Correct answer.
  2. The credit applies only to individual Marketplace plans
  3. The credit is available only to employers with more than 100 employees
  4. The credit is paid directly to employees rather than employers

Explanation

The small business health care tax credit is available to certain eligible small employers that contribute to employee premiums, and purchasing coverage through SHOP is generally required to claim it. It is a credit for the employer, not a payment to employees.

Question 39Health Insurance Providers and the Marketplace

A Marketplace applicant reports income that would make the household eligible for Medicaid in an expansion state. What is the appropriate eligibility determination outcome?

  1. Denial of all coverage with no referral
  2. Enrollment in a catastrophic plan regardless of age
  3. Enrollment in a qualified health plan with premium tax credits
  4. Referral to the state Medicaid agency for determination Correct answer.

Explanation

The Marketplace conducts a streamlined eligibility determination and, when income appears to qualify for Medicaid, refers the application to the state Medicaid agency. Premium tax credits are not available to those eligible for Medicaid.

Question 40Health Insurance Providers and the Marketplace

An issuer operating in the individual market must comply with the medical loss ratio standard. What does the MLR measure?

  1. The ratio of in-network to out-of-network providers
  2. The ratio of bronze to silver plan enrollment
  3. The percentage of enrollees who renew coverage each year
  4. The percentage of premium revenue spent on claims and quality improvement activities Correct answer.

Explanation

The medical loss ratio measures the share of premium revenue an issuer spends on clinical services and quality improvement rather than administration and profit. Issuers failing the applicable standard must provide rebates to enrollees.

Question 41Health Insurance Providers and the Marketplace

A consumer selects a silver plan and later learns that the plan's deductible is $4,500. Which statement about the deductible and essential health benefits is accurate?

  1. The deductible may apply to all essential health benefits without restriction
  2. The deductible must be the same across all metal tiers
  3. Preventive services must be covered without cost sharing even before the deductible is met Correct answer.
  4. The deductible is set by the Marketplace rather than the issuer

Explanation

Non-grandfathered plans must cover recommended preventive services without cost sharing, so those services cannot be subject to the deductible. Issuers otherwise design deductibles within actuarial value and cost-sharing limits.

Question 42Health Insurance Providers and the Marketplace

An issuer wants to vary premiums in the individual market based on tobacco use. Which limitation applies?

  1. Tobacco rating is prohibited entirely in the individual market
  2. Tobacco rating may vary premiums by no more than 3 to 1
  3. Tobacco rating may vary premiums by no more than 1.5 to 1 Correct answer.
  4. Tobacco rating may be applied without any ratio limit

Explanation

The ACA permits issuers to vary premiums for tobacco use by a ratio of no more than 1.5 to 1. Other permitted rating factors include age, geography, and family size, each within specified limits.

Question 43Health Insurance Providers and the Marketplace

An issuer markets a plan as a qualified health plan but omits required information about cost sharing in its enrollment materials. Which compliance risk is most directly implicated?

  1. Violation of the premium tax credit reconciliation process
  2. Violation of the medical loss ratio rebate calculation
  3. Violation of Marketplace marketing and disclosure standards Correct answer.
  4. Violation of the SHOP employer eligibility rules

Explanation

Qualified health plans must comply with marketing and disclosure standards, including accurate information about benefits and cost sharing. Misleading or incomplete enrollment materials can jeopardize certification and trigger enforcement.

Question 44Health Insurance Providers and the Marketplace

A state operates a state-based Marketplace and wants to permit issuers to offer plans that do not meet all federal certification standards. What is the governing constraint?

  1. The state may waive standards only for catastrophic plans
  2. The state must obtain federal approval through a waiver, and the plan must still provide coverage at least as comprehensive and affordable Correct answer.
  3. The state may waive any standard it chooses without federal approval
  4. The state may act only if CMS transfers all Marketplace functions to the state

Explanation

Section 1332 waivers allow states to pursue innovative strategies, but approval requires that coverage remain at least as comprehensive and affordable, cover a comparable number of residents, and not increase the federal deficit. States cannot unilaterally waive certification standards.

Question 45Health Insurance Providers and the Marketplace

An issuer's silver plan has an actuarial value of 72%. How does this interact with cost-sharing reduction variants offered to eligible enrollees?

  1. Cost-sharing reduction variants increase actuarial value for eligible enrollees while the standard silver plan remains at its approved level Correct answer.
  2. Cost-sharing reduction variants reduce actuarial value to offset the subsidy
  3. Actuarial value is irrelevant once an enrollee receives cost-sharing reductions
  4. The standard silver plan must be reclassified as a gold plan

Explanation

Issuers offering silver plans must also offer cost-sharing reduction variants that raise actuarial value for eligible low-income enrollees. The standard silver plan keeps its approved actuarial value, and the variants are priced and structured separately.

Question 46Health Insurance Providers and the Marketplace

A consumer receives advance premium tax credits but fails to file a federal tax return for the year. What consequence may follow for future eligibility?

  1. The issuer must repay the credit on the consumer's behalf
  2. The consumer may be barred from receiving advance premium tax credits until the return is filed Correct answer.
  3. The consumer is automatically enrolled in Medicaid
  4. The Marketplace must retroactively terminate all prior coverage

Explanation

Reconciliation of advance premium tax credits requires filing a federal tax return. Consumers who fail to reconcile may be ineligible for advance credits in subsequent years until they file and reconcile.

Question 47Health Insurance Providers and the Marketplace

An issuer offering a qualified health plan must include essential community providers in its network. Which rationale best explains this requirement?

  1. To guarantee that every provider in the state participates in the network
  2. To ensure access for low-income and medically underserved enrollees who rely on those providers Correct answer.
  3. To set the actuarial value of the plan
  4. To eliminate the need for network adequacy standards

Explanation

Essential community providers serve low-income and medically underserved populations, so including them supports access for enrollees who depend on those providers. The requirement operates alongside, rather than replacing, broader network adequacy standards.

Question 48Health Insurance Providers and the Marketplace

An issuer discovers that an enrollee's advance premium tax credit was calculated using overstated income, resulting in a smaller credit than allowed. What is the appropriate treatment?

  1. The Marketplace must reopen the enrollment period for all consumers
  2. The enrollee may claim the additional credit when filing the tax return Correct answer.
  3. The enrollee forfeits the difference permanently
  4. The issuer must increase the premium refund to the enrollee during the year

Explanation

Advance credits are reconciled on the tax return, so if the advance amount was lower than the allowed credit, the enrollee claims the difference as a credit at filing. The issuer does not adjust the premium refund mid-year for this purpose.

Question 49Medical Expense Insurance

A group medical expense policy states that benefits for a covered illness begin after the employee has been insured under the plan for 90 days. What is this 90-day period called?

  1. Elimination period
  2. Conversion period
  3. Coordination period
  4. Probationary period Correct answer.

Explanation

A probationary period is the waiting time an employee must satisfy after first becoming eligible before coverage for a condition or for any benefits begins. It applies to the insured's initial enrollment, unlike an elimination period, which is a per-claim waiting time before benefits are paid.

Question 50Medical Expense Insurance

Under a typical individual major medical policy, which of the following is generally classified as a covered basic medical expense rather than an optional or supplemental benefit?

  1. Hospital room and board Correct answer.
  2. Long-term custodial care
  3. Vision hardware allowance
  4. Accidental death and dismemberment

Explanation

Basic medical expense benefits in a major medical structure typically include hospital room and board, inpatient services, and physician care, with major medical picking up costs above the deductible. Vision hardware, custodial care, and accidental death benefits are usually separate or supplemental coverages rather than core basic expense benefits.