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1. A consumer enrolls in a California Health Maintenance Organization (HMO). Which state agency has primary regulatory authority over that HMO?

Under the Knox-Keene Health Care Service Plan Act, California HMOs are regulated by the Department of Managed Health Care (DMHC), not the CDI. The CDI regulates indemnity health insurance and PPO products, but full-service HMOs fall under DMHC.

2. Under the federal Affordable Care Act, a non-grandfathered group health plan must cover recommended preventive services with:

Section 2713 of the Public Health Service Act, added by the ACA, requires non-grandfathered plans to cover certain preventive services (such as immunizations, screenings, and annual wellness visits) without imposing any deductible, copayment, or coinsurance when delivered in-network.

3. An employee voluntarily quits her job at a private company with 60 employees. Under federal COBRA, the maximum continuation coverage period available to her is:

Voluntary or involuntary termination (other than for gross misconduct) and reduction in hours are 'qualifying events' that entitle a covered employee to up to 18 months of COBRA continuation. The 29-month period applies only when the qualified beneficiary becomes disabled, and 36 months applies to dependent events such as death, divorce, or loss of dependent status.

4. Cal-COBRA differs from federal COBRA primarily because it:

Federal COBRA applies only to employers with 20 or more employees. Cal-COBRA fills the gap by requiring continuation coverage from California group health plans of small employers with 2 to 19 employees, generally for up to 36 months total.

5. To be eligible to contribute to a Health Savings Account (HSA), an individual must be covered by:

Section 223 of the Internal Revenue Code requires an HSA-eligible individual to be covered under a qualifying HDHP and to have no other disqualifying health coverage. Enrollment in Medicare disqualifies a person from making new HSA contributions.

6. Under the ACA metal-tier framework, a silver plan must cover what approximate percentage of the average enrollee's covered medical costs (its actuarial value)?

The ACA defines four metal tiers by actuarial value: bronze at approximately 60%, silver at 70%, gold at 80%, and platinum at 90%. Catastrophic plans are separate and available only to certain enrollees.

7. A 45-year-old applicant with a history of diabetes applies for an individual ACA-compliant health policy through Covered California. The insurer may:

Since 2014, the ACA has prohibited individual and group market insurers from denying coverage, charging higher premiums, or excluding benefits based on any pre-existing condition. Permitted rating factors are limited to age, geography, family size, and tobacco use.

8. Under the ACA, a group health plan that offers dependent coverage must make that coverage available to an enrolled employee's adult child until the child reaches age:

The ACA requires plans offering dependent coverage to allow enrolled adult children to remain on a parent's plan until age 26, regardless of marital status, residency, financial dependence, or student status.

9. Which of the following is NOT one of the ten Essential Health Benefits categories that an ACA-compliant individual or small group plan must cover?

The ten Essential Health Benefits include ambulatory services, emergency services, hospitalization, maternity/newborn care, mental health/substance use, prescription drugs, rehabilitative services, lab services, preventive/chronic disease management, and pediatric (not adult) services including dental and vision. Adult dental and vision are not required.

10. A health plan has a $2,000 deductible, 20% coinsurance, and a $7,500 out-of-pocket maximum. Once the insured reaches the out-of-pocket maximum, in-network covered services for the rest of the plan year are paid at:

The out-of-pocket maximum (sometimes called the MOOP) is the annual cap on a member's cost-sharing for in-network essential benefits. Once it is reached, the plan must pay 100% of covered in-network services for the remainder of the plan year.

11. A key structural difference between a traditional HMO and a Preferred Provider Organization (PPO) is that the HMO:

A core HMO feature is the gatekeeper PCP who coordinates and authorizes referrals to specialists. HMOs typically only pay for in-network care, with emergencies as the main exception. PPOs allow direct access to specialists and pay reduced benefits for out-of-network care.

12. An Exclusive Provider Organization (EPO) plan is best described as a plan that:

An EPO restricts non-emergency benefits to the in-network panel of providers, much like an HMO, but unlike a traditional HMO it generally does not require a PCP referral to see specialists. Out-of-network non-emergency care is usually not covered.

13. Which type of managed care plan combines features of an HMO (PCP gatekeeper) with limited out-of-network coverage at a higher cost share?

A Point of Service (POS) plan blends HMO and PPO features. The member selects a PCP who manages and refers care, but unlike a pure HMO the plan also pays a reduced benefit when the member uses out-of-network providers.

14. Which of the following best defines coinsurance?

Coinsurance is the percentage share of covered expenses the insured pays (for example, 20%) after the deductible has been satisfied; the plan pays the remaining percentage. A deductible is the dollar amount paid before benefits start, and a copay is the fixed per-service charge.

15. The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 primarily addresses which of the following?

HIPAA was enacted in 1996 to standardize electronic health transactions, protect the privacy and security of individually identifiable health information (PHI), and improve portability and continuity of group health coverage when workers change jobs.

16. Covered California is best described as:

Covered California is the state-operated Affordable Care Act exchange (marketplace) where individuals and small employers can compare and enroll in qualified health plans and where income-eligible enrollees receive federal and state premium assistance.

17. As of 2026, California residents who go without minimum essential health coverage may face which of the following?

The federal individual mandate penalty was reduced to $0 starting in 2019, but California enacted its own Individual Shared Responsibility Penalty effective January 1, 2020. It is administered through the Franchise Tax Board and assessed on the state income tax return.

18. A Flexible Spending Account (FSA) used to pay for qualifying medical expenses is best described as:

A health FSA established under an IRC §125 cafeteria plan is funded with pre-tax employee salary reductions (and any employer contributions). Unused balances are generally forfeited at year-end, although plans may allow a limited carryover or grace period.

19. A Health Reimbursement Arrangement (HRA) is most accurately described as:

An HRA is funded solely by the employer (not by employee salary reductions) and is owned by the employer. It reimburses employees, tax-free, for qualified medical expenses up to the amount the employer allocates, under rules in IRC §105 and IRS guidance.

20. Balance billing in a health plan context refers to:

Balance billing occurs when a provider bills the patient for the difference between the provider's total charge and the amount the insurer pays as the allowed amount. In-network providers typically agree not to balance bill; out-of-network or surprise-billing scenarios are addressed by laws like the federal No Surprises Act and California AB 72.

21. An employer that pays employee medical claims directly out of its own funds, rather than purchasing a fully insured group policy, is using:

In a self-funded (self-insured) plan, the employer assumes the financial risk for claims and typically buys stop-loss (reinsurance) coverage that caps the employer's exposure per individual claim and on an aggregate annual basis. Self-funded plans are generally governed by ERISA at the federal level.

22. A major medical health insurance policy is best characterized by:

Major medical insurance provides broad coverage for hospital, surgical, physician, and outpatient care subject to plan design features such as a deductible, coinsurance, copayments, and an annual out-of-pocket maximum. Limited-benefit, accident-only, and indemnity policies are distinct product types.

23. A health plan that requires the member to pay $30 every time they visit their primary care doctor is using which cost-sharing tool?

A copayment (copay) is a fixed dollar amount the member pays at the time of service, regardless of total charges. Deductibles are paid before benefits begin, coinsurance is a percentage share after the deductible, and the out-of-pocket maximum is the annual cap on cost-sharing.

24. With respect to Essential Health Benefits on an ACA-compliant plan, an insurer may impose:

The ACA prohibits both annual and lifetime dollar limits on Essential Health Benefits. Non-essential benefits may still be subject to limits, but the ten categories of Essential Health Benefits (hospitalization, prescription drugs, maternity, etc.) must be offered without dollar caps.

25. A spouse of a covered employee loses dependent coverage because of divorce. Under federal COBRA, the maximum continuation coverage period available to the divorced spouse is:

Divorce or legal separation is a qualifying event that affects spouses and dependent children. The maximum COBRA continuation period for such 'dependent' qualifying events (including death of the covered employee or a child losing dependent status) is 36 months.