Vermont Health Insurance Practice Exam Free - 2026

• A. 25
• B. 26
• C. 19, unless a full-time student
• D. 21

Correct answer: B. 26

Explanation: 8 V.S.A. § 4057(d) requires a plan providing dependent coverage of children to continue to make it available for an adult child until the child attains 26 years of age (except specified-disease or limited-benefit plans). Ages 25 and 21 are not the Vermont limit, and C describes the pre-reform student-dependent rule that § 4057(d) supersedes. See 8 V.S.A. § 4057.

• A. 36 months
• B. 12 months
• C. 18 months
• D. 29 months

Correct answer: C. 18 months

Explanation: 8 V.S.A. § 4047c(1) terminates continuation coverage 18 months after the date insurance under the policy would have terminated due to the qualifying event (or earlier on nonpayment, Medicare coverage, other group coverage or policy termination). Thirty-six and 29 months (A, D) are federal COBRA extension periods for certain events, not Vermont's statutory limit, and 12 months is not used in § 4047c. See 8 V.S.A. § 4047c.

• A. Allow a 10-day grace period; no advance notice is required
• B. Allow a 31-day grace period and send a termination notice 14 days before termination
• C. Notify the policyholder 14 days before the due date and allow a 30-day grace period
• D. Notify the policyholder at least 21 days before the due date, allow a grace period of at least one month, and send a termination notice at least 21 days before termination

Correct answer: D. Notify the policyholder at least 21 days before the due date, allow a grace period of at least one month, and send a termination notice at least 21 days before termination

Explanation: 8 V.S.A. § 4021(a) requires a major medical insurer to give notice of the premium due at least 21 days before the due date, provide a grace period of at least one month, and, if payment is not received, send a termination notice at least 21 days before termination, which may not precede the end of the grace period. The 14-day termination notice in B applies to non-major-medical policies under § 4021(b); A and C use periods not in the statute. See 8 V.S.A. § 4021.

• A. The six-month period beginning the first month he is both 65 or older and enrolled in Part B
• B. The three-month period after his 65th birthday
• C. The twelve-month period after Part B enrollment
• D. Ninety days after the Part B effective date

Correct answer: A. The six-month period beginning the first month he is both 65 or older and enrolled in Part B

Explanation: Regulation H-2009-04 § 11(A) prohibits an issuer from denying or conditioning issuance, or discriminating in pricing, for an application submitted prior to or during the six (6) month period beginning with the first day of the first month in which the individual is both 65 or older and enrolled in Medicare Part B. Three months, twelve months and 90 days (B, C, D) are not the Vermont open-enrollment window. See Vt. Ins. Reg. H-2009-04 § 11.

• A. Paying claims by assignment of benefits
• B. Offering premium discounts for automatic bank drafts
• C. Advertising during open enrollment season
• D. Restricting enrollment to defined enrollment periods and applying probationary waiting periods

Correct answer: D. Restricting enrollment to defined enrollment periods and applying probationary waiting periods

Explanation: Adverse selection is the tendency of people who are more likely to have claims to seek or keep coverage. Insurers counter it with tools such as limited enrollment periods, probationary or waiting periods, and careful risk classification, which prevent people from buying coverage only after a loss is imminent. Payment conveniences and advertising do not manage risk selection.

• A. It lets member insurers exchange coded underwriting information so misrepresentations on applications can be detected
• B. It maintains complete copies of applicants' medical records for insurers to review
• C. It approves or denies claims on behalf of member insurers
• D. It sets the premium rates that member insurers must charge

Correct answer: A. It lets member insurers exchange coded underwriting information so misrepresentations on applications can be detected

Explanation: The MIB is a membership organization through which insurers share brief, coded information reported during past underwriting. When a new application conflicts with an MIB code, the underwriter is alerted to investigate further, which helps deter misrepresentation and fraud. It does not store full medical records, pay claims, or set rates.

• A. The producer sets the final premium in the field before submitting the application
• B. The producer is the company's first source of risk information, accurately recording answers and observations about the applicant
• C. The producer must physically examine the applicant before coverage is issued
• D. The producer has authority to reject applications on the insurer's behalf

Correct answer: B. The producer is the company's first source of risk information, accurately recording answers and observations about the applicant

Explanation: The agent is the first line of underwriting: he or she sees the applicant in person, asks the application questions, records answers completely and accurately, and passes along relevant observations. The home office underwriter, not the agent, makes the final decision to issue, rate, or decline, and the agent neither sets premiums nor examines applicants medically.

• A. Disability insurers must charge everyone in a state the same rate
• B. Disability underwriting ignores occupation and considers only medical history
• C. Disability insurers assign applicants to occupational classes, and more hazardous occupations are rated less favorably
• D. Federal law requires manual laborers to buy coverage through group plans only

Correct answer: C. Disability insurers assign applicants to occupational classes, and more hazardous occupations are rated less favorably

Explanation: Occupation is a central rating factor in disability income underwriting because the duties a person performs drive both the likelihood of disabling injury and the difficulty of returning to work. Insurers group occupations into classes, and applicants in hazardous classes face higher premiums, longer elimination periods, shorter benefit periods, or limited monthly benefits.

• A. The indemnity (fixed cash benefit) approach
• B. The expense-incurred approach
• C. The service (prepaid) approach
• D. The coordination of benefits approach

Correct answer: A. The indemnity (fixed cash benefit) approach

Explanation: An indemnity approach pays a stated dollar amount per day or event no matter what expenses are actually incurred. An expense-incurred plan reimburses actual covered charges up to policy limits, while a service plan arranges for care itself, paying providers directly for services rather than paying cash to the insured.

• A. $1,000
• B. $4,000
• C. $2,000
• D. $1,800

Correct answer: D. $1,800

Explanation: The insured first pays the $1,000 deductible, leaving $4,000 of covered charges. The insurer then pays 80% of that amount ($3,200) and the insured pays the 20% coinsurance share ($800). His total is $1,000 plus $800, or $1,800.

• A. The policy terminates for the remainder of the year
• B. The insurer pays 100% of covered expenses for the rest of the benefit period
• C. The deductible doubles for all later claims that year
• D. The insured must switch to a network provider to keep coverage

Correct answer: B. The insurer pays 100% of covered expenses for the rest of the benefit period

Explanation: A stop-loss (out-of-pocket) limit caps the insured's share of covered expenses. After deductible and coinsurance payments accumulate to the limit, coinsurance ends and the insurer pays covered charges in full for the remainder of the period. It protects the insured against catastrophic cost sharing; it does not end coverage or change the deductible.

• A. The insurer pays whatever amount the surgeon bills
• B. The insurer pays a flat scheduled amount fixed at policy issue for every procedure
• C. Payment is based on the prevailing charge for the same procedure by similar providers in the same geographic area
• D. Payment equals the Medicare-approved amount for the procedure

Correct answer: C. Payment is based on the prevailing charge for the same procedure by similar providers in the same geographic area

Explanation: Under a UCR approach, the insurer compares the provider's bill with what other providers in the same area typically charge for the same service and pays up to that prevailing level. Charges above the UCR amount can be balance-billed to the insured. It is not an open-ended promise to pay any billed amount, nor a fixed surgical schedule.