Colorado Health Insurance Practice Exam Free - 2026

• A. Permitted, because he is married
• B. Not permitted; dependent coverage must be available to children under 26 regardless of residency, marital status, or student status
• C. Permitted, because he is over 23
• D. Permitted, because he is not financially dependent

Correct answer: B. Not permitted; dependent coverage must be available to children under 26 regardless of residency, marital status, or student status

Explanation: C.R.S. § 10-16-104.3 requires carriers to make dependent coverage available to children under twenty-six years of age and prohibits denying or restricting it based on residency, financial dependence, marital or civil union status, student status, employment status, or eligibility for other coverage. A, C, and D each rely on a factor the statute expressly forbids. See C.R.S. § 10-16-104.3.

• A. Large employer, because it exceeds 50 employees
• B. Large employer, because it exceeds 25 employees
• C. Small employer, because it has at least 1 but not more than 100 eligible employees
• D. Neither; small-group rules apply only to 2 to 50 employees

Correct answer: C. Small employer, because it has at least 1 but not more than 100 eligible employees

Explanation: C.R.S. § 10-16-102(61) defines a small employer as one that employed an average of at least one but not more than one hundred eligible employees on business days during the immediately preceding calendar year; a large employer averaged more than one hundred. The 50-employee and 2-to-50 thresholds in A and D are not Colorado's current definition, and 25 in B has no basis. See C.R.S. § 10-16-102(61).

• A. June 15 (15 days)
• B. July 1 (30 calendar days); a paper claim would get 45 calendar days
• C. July 16 (45 calendar days) for all claims
• D. August 30 (90 calendar days)

Correct answer: B. July 1 (30 calendar days); a paper claim would get 45 calendar days

Explanation: C.R.S. § 10-16-106.5 requires clean claims to be paid or denied within thirty calendar days after receipt if submitted electronically and within forty-five calendar days if submitted by mail, fax, or hand delivery, with a ninety-day outer limit for claims needing additional information. A is not a statutory period; C applies the paper period to electronic claims; D is the outer limit for non-clean claims. See C.R.S. § 10-16-106.5.

• A. The covered person must request review within 4 months of the denial notice, the carrier pays the review cost, and the decision binds the carrier
• B. The covered person pays a filing fee and the decision is advisory only
• C. Review is available only for claims over $500
• D. Expedited review must be decided within 30 days

Correct answer: A. The covered person must request review within 4 months of the denial notice, the carrier pays the review cost, and the decision binds the carrier

Explanation: Under C.R.S. § 10-16-113.5 the request for independent external review must be made within four months after notification of the denial, the carrier pays the cost with no minimum claim amount, and the expert reviewer's determination is binding on the carrier and the individual; an expedited review must be decided within seventy-two hours. B, C, and D each contradict those verified terms. See C.R.S. § 10-16-113.5.

• A. Catastrophic Hospital Indemnity Plan paying a fixed daily benefit for inpatient stays
• B. Children's Health Insurance Program providing coverage for uninsured children
• C. A federal program providing prescription drug coverage to children enrolled in Medicare
• D. A federal-state program providing health coverage to disabled adults with low incomes

Correct answer: B. Children's Health Insurance Program providing coverage for uninsured children

Explanation: CHIP (Children's Health Insurance Program) is a federal-state program providing health coverage to uninsured children in families with incomes too high for Medicaid but too low for private insurance.

• A. The tendency for insured individuals to use more care because they do not bear its full cost
• B. The practice of insurers declining applicants whose risk exceeds underwriting limits
• C. The tendency for higher-risk individuals to seek more insurance coverage
• D. The tendency for lower-risk individuals to purchase more coverage than they need

Correct answer: C. The tendency for higher-risk individuals to seek more insurance coverage

Explanation: Adverse selection occurs when individuals with higher health risks are more likely to purchase insurance, while healthier people may decline coverage, leading to a disproportionate number of claims.

• A. The tendency for people in poor health to buy more coverage than healthy people
• B. A physical condition of the insured that increases the chance of loss
• C. The insurer's practice of denying claims it believes were not medically necessary
• D. The tendency to use more services because insurance covers them

Correct answer: D. The tendency to use more services because insurance covers them

Explanation: Moral hazard in health insurance is the tendency for insured individuals to use more medical services or take less care of their health because they don't bear the full cost of their decisions.

• A. A Medical Information Bureau (MIB) report
• B. An inspection report
• C. An attending physician statement (APS)
• D. An agent's certification

Correct answer: C. An attending physician statement (APS)

Explanation: An attending physician statement is a report the underwriter requests, with the applicant's written authorization, from a physician who has treated the applicant. It provides detail the application and MIB codes cannot - diagnoses, treatment dates, and prognosis. The MIB, by contrast, is an industry database of brief coded underwriting information shared among member insurers.

• A. The policy was issued on a rated (substandard) basis
• B. The applicant was declined
• C. The policy includes an impairment exclusion rider
• D. The applicant received a preferred classification

Correct answer: A. The policy was issued on a rated (substandard) basis

Explanation: When health history raises the expected risk but the applicant is still insurable, the insurer can issue a rated - also called substandard - policy at a higher premium. That differs from an exclusion rider, which carves a named condition out of coverage, and from declination. Disability insurers may also shorten the benefit period or lengthen the elimination period for substandard risks.

• A. The quality of the doctors in the plan's network
• B. The average share of covered medical costs the plan pays
• C. How large the insurance company is
• D. How quickly the plan processes claims

Correct answer: B. The average share of covered medical costs the plan pays

Explanation: Metal levels reflect actuarial value - the average percentage of covered costs a plan pays across a standard population: roughly 60% for Bronze, 70% for Silver, 80% for Gold, and 90% for Platinum. Higher metal levels mean higher premiums but lower out-of-pocket costs. The levels say nothing about provider quality or claims service.

• A. The insurer must renew coverage and may not raise the premium at renewal
• B. The insurer must accept any new applicant regardless of health status
• C. The insurer may decline renewal if the insured's health has declined
• D. The insurer must renew coverage as long as premiums are paid

Correct answer: D. The insurer must renew coverage as long as premiums are paid

Explanation: Guaranteed renewability means the insurer cannot refuse to renew coverage as long as premiums are paid. The insurer can increase premiums for the entire class but cannot single out individuals.

• A. Retroactive cancellation of coverage due to fraud or intentional misrepresentation
• B. Renewal of the policy at its anniversary on the same terms
• C. Prospective termination of coverage for nonpayment of premium
• D. Reduction of benefits for a misstatement of age on the application

Correct answer: A. Retroactive cancellation of coverage due to fraud or intentional misrepresentation

Explanation: Under the ACA a health plan may not retroactively cancel coverage except where the individual commits fraud or makes an intentional misrepresentation of material fact, and the insurer must give at least 30 days advance written notice. Ordinary administrative errors, a change in health status, or the cost of claims are not grounds for rescission. Prospective termination for nonpayment of premium is a different matter and is still allowed.