Colorado Statutes, Rules, and Regulations for Sickness & Accident Insurance Only

Question 1

Insurers must provide health insurance claim forms within how many days?
A5
B7
C15
D20

Answer 1

C. 15

After receiving notice of claim from the insured (within 20 days from the date of loss), an insurer must provide claim forms within 15 days of the notice, so that the insured can submit proof of loss (within 90 days of the loss).

Question 2

When must an outline of coverage be provided to a prospective applicant?
AUpon the request of an applicant
BAt the time the first premium is collected
CAt the time of initial solicitation
DAt the time a policy is issued

Answer 2

CAt the time of initial solicitation

An outline of coverage will be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.

Question 3

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
A10%
B30%
C40%
D60%

Answer 3

D60%

Under the bronze plan, the health plan is expected to cover 60% of the cost for an average population, and the participants would cover the remaining 40%.

Question 4

An insurer may adopt standards and criteria for eligibility to be applied to home health services programs and hospice care programs consistent with standards established by the
ANational Association of Insurance Commissioners.
BAmerican Medical Association.
CDepartment of Public Health and Environment.
DNational Association of Nursing Homes.

Answer 4

CDepartment of Public Health and Environment.

Insurers may adopt standards and criteria for eligibility to be applied to home health care services and hospice care programs consistent with standards established in rules and regulations of the Department of Public Health and Environment.

Question 5

A Medicare supplement policy may deny a claim for a loss caused by a pre-existing condition within what maximum time period from the effective date of coverage?
A30 days
B2 months
C3 months
D6 months

Answer 5

D6 months

A Medicare supplement policy may not deny a claim for losses incurred more than 6 months from the effective date of coverage for a pre-existing condition.

Question 6

No individual or group policy of sickness and accident insurance issued by an insurer, nor a plan which provides hospital, surgical, or major medical coverage on an expense incurred basis will be sold in Colorado unless a policyholder under the policy or plan is offered the opportunity to purchase coverage for
ADental care coverage.
BPrescription drug benefit.
CVision coverage.
DHome health services and hospice care which have been recommended by a physician as medically necessary.

Answer 6

DHome health services and hospice care which have been recommended by a physician as medically necessary.

All health insurance policies or plans must offer to the policyholder the opportunity to purchase coverage for benefits for the cost of home health services and hospice care which have been recommended by a physician as medically necessary.

Question 7

Which of the following provisions allows an insured to sue an insurance company for nonpayment of claim?
ALegal Action
BIncontestability
CProof of Loss
DTime Limit on Certain Defenses

Answer 7

ALegal Action

Legal Action provision allows the insured to sue an insurance company for nonpayment of claim and it is only allowed for up to 3 years after filing proof of loss.

Question 8

According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?
APlatinum
BBronze
CSilver
DGold

Answer 8

APlatinum

Bronze level benefit plans pay 60% of expected health care costs; silver level plans pay 70%; gold level plans pay 80%, and platinum level plans pay 90%.

Question 9

How long is a newborn covered without notification to the insurer?
AA newborn is not covered without notification to the insurer.
BFrom the moment of birth, and the insurer must be notified within 31 days
CFrom the time labor has begun, and the insurer must be notified within 31 days
DFrom the moment of birth, and the insurer must be notified within 90 days

Answer 9

BFrom the moment of birth, and the insurer must be notified within 31 days

A newborn is covered without notification to the insurer from the moment of birth. The insured must notify the insurer within 31 days of birth.

Question 10

What is the minimum fine applied to a producer who violates any Colorado law relating to the regulation of long-term care insurance?
A$4,000
B$6,000
C$8,000.
D$10,000

Answer 10

D$10,000

The fine is established by regulation, of up to 3 times the amount of any commission paid for each policy involved in the violation or up to $10,000, whichever is greater.

Question 11

Which of the following is NOT a qualifying event which allows an individual to join group coverage during a special enrollment period?
AAn individual becomes a dependent of a covered person through marriage.
BAn individual loses coverage due to the death or divorce of a covered employee.
CAn individual loses coverage after committing insurance fraud.
DCovered employee’s employment hours are reduced.

Answer 11

CAn individual loses coverage after committing insurance fraud.

Losing coverage after committing insurance fraud is not considered a qualifying event.

Question 12

In regards to biologically based mental illnesses and mental disorders, group health policies in Colorado
AAre not required to provide coverage.
BMay provide less or more coverage than is provided for a physical illness.
CMust provide the same coverage that is provided for a physical illness.
DMust provide more coverage than is provided for a physical illness.

Answer 12

CMust provide the same coverage that is provided for a physical illness.

Group health policies must provide coverage for the treatment of biologically based mental illnesses and mental disorders that is no less extensive than the coverage provided for a physical illness.

Question 13

Which of the following is defined as the demographic characteristics that carriers consider when determining premium rates for individuals and small employers?
ACase characteristics
BDeclarations
CEndorsements
DCensus reports

Answer 13

ACase characteristics

Colorado law defines case characteristics as demographic characteristics that carriers consider when determining premium rates for individuals and small employers.

Question 14

What is the maximum dollar limit that must be provided under a sickness and accident insurance policy for annual prostate cancer screening for early prostate cancer in men?
A$65
B$35
C$50
D$60

Answer 14

A$65

All policies must provide coverage for annual prostate cancer screening for the early detection of prostate cancer in men over age 50 for the lesser of the actual cost of the screening or $65.

Question 15

Colorado law requires all of the following regarding mammography coverage for women EXCEPT
ACoverage includes an annual mammogram for eligible women.
BIt must be included on individual policies.
CIt must be included on group policies.
DIt may be subject to a deductible.

Answer 15

DIt may be subject to a deductible.

Mammography screenings are considered preventive services and may not be subject to deductibles or co-insurance. All policies must include coverage for preventive services as an essential health benefit.

Question 16

Long-term care coverage may be sold in all of the various ways EXCEPT
AAs a part of a Medicare supplement policy by the use of an endorsement.
BGroup long-term care.
CIndividual long-term care.
DAs a part of a life insurance policy through the use of an endorsement.

Answer 16

AAs a part of a Medicare supplement policy by the use of an endorsement.

Question 17

Which of the following statements is true regarding deductibles and coinsurance for treatment of mental illness?
ADeductibles may not differ from those established for other conditions, but copayments may differ as long as they don’t exceed 50%.
BDeductibles may differ as long as they don’t exceed $500, but copayments may not differ.
CThey may differ from those established for other conditions covered by the policy.
DThey may not differ from those established for other conditions.

Answer 17

DThey may not differ from those established for other conditions.

Under Colorado Law, coverage for mental illness on a large group policy must be the same as any other illness covered by the policy. The Affordable Care Act includes coverage for mental illness as an essential health benefit.

Question 18

Which of the following is not a purpose of the Long-Term Care Act?
AProtect applicants
BPromote public interest
CEstablish standards
DMake LTC insurance affordable

Answer 18

DMake LTC insurance affordable

The Long Term Care Act does not address the premium cost of the coverage.

Question 19

A health coverage plan will not make a determination that it will deny a request for benefits for a covered individual on grounds that such treatment of covered benefit is not medically necessary, unless such denial is made according to procedure including all of the following, EXCEPT
AThe claims investigator wishes to wait a period of time to see if the procedure remains necessary.
BSignature of a licensed physician familiar with standards of care in Colorado if denial is based on benefits not medically necessary.
CThe specific reasons for the adverse determination.
DAn explanation of the specific medical basis for the denial.

Answer 19

AThe claims investigator wishes to wait a period of time to see if the procedure remains necessary.

Denial of claims or benefits must be based upon determinations that conform with Colorado law. The claim may not be denied at the claims investigator’s wish to wait to see if the procedure remains necessary.

Question 20

In all individual and small employer health benefit plans, how long is the grace period for persons receiving the federal advance payment tax credit?
A10 days
B30 days
C2 months
D3 months

Answer 20

D3 months

For persons receiving a subsidy under the federal act or the federal advance payment tax credit (APTC), all individual and small employer health benefit plans must contain a grace period of 3 months.

Question 21

Before a carrier can offer health benefit plans to small employers what must be filed?
AMarket Transaction Document
BBalance Sheet
CNotice of intent
DGuaranteed Issue Warran

Answer 21

CNotice of intent

A notice of intent must be filed with the Commissioner before a carrier can offer health benefit plans to small employers in the state of Colorado.

Question 22

Mrs. B applied for a Medicare Supplement policy one month before her 65th birthday. The policy was issued on her birthday, January 31. Her producer mailed the policy by certified mail, and Mrs. B received the policy on February 5. How many days does she have to examine the policy and decide whether or not to keep the policy?
A30 days from the date of the application
B30 days from the date it was received
C30 days from the date it was issued
D10 days from the date it was received

Answer 22

B30 days from the date it was received

Medicare Supplements must include a 30-day free-look provision.

Question 23

Health insurance policies become incontestable after what time period from the policy issue?
A1 year
B18 months
C2 years
D3 years

Answer 23

C2 years

Time Limit of Certain Defenses clause states that policies are incontestable, except for fraud, after a certain amount of time. In Colorado that time is 2 years.

Question 24

When can an insured initiate legal action against the insurer?
ANo later than 1 year from the loss
BAt any time after the loss
CWithin 20 days after the loss
D60 days after submitting proof of loss

Answer 24

D60 days after submitting proof of loss

The insured must wait at least 60 days after submitting written proof of loss before legal action can be taken.

Question 25

Which of the following factors would be an underwriting consideration for a small employer carrier?
APercentage of participation by the employees
BClaims experience
CHealth status
DMedical history

Answer 25

APercentage of participation by the employees

Coverage under a small employer health benefit plan is generally available only if at least 75% of eligible employees elect to be covered.

Question 26

To be classified as a clean claim, a claim must
ABe for a covered loss on a covered person.
BBe submitted on a blank sheet of paper.
CBe submitted on the uniform claim form with all fields completed with correct information.
DBe submitted on the insurer’s own claim form.

Answer 26

CBe submitted on the uniform claim form with all fields completed with correct information.

“Clean claim” refers to claim for payment of health care expenses that is submitted to the carrier on the uniform claim form with all required fields completed with correct and complete information.

Question 27

Rating factors DO NOT reflect differences due to the nature of the groups assumed to select particular health plans. Rating factors DO produce premiums for identical groups that differ only by
AThe general health of the company’s employees.
BThe type of coverage in the plan.
CThe amount of the plan design.
DThe number of employees.

Answer 27

CThe amount of the plan design.

Rating factors produce premiums for identical groups that differ only by the plan design amount. A small employer carrier will treat all health benefit plans issued or renewed in the same calendar month as having the same rating period.

Question 28

During a sale of a Medicare Supplement policy, an agent must give out a copy of the Buyer’s Guide and an Outline of Coverage. The Outline must state all of the following EXCEPT
ASupplementary coverage.
BWhat the policy covers.
CHow the agent’s commission is paid.
DWhat it pays of the gaps in Medicare.

Answer 28

CHow the agent’s commission is paid.

Commissions paid out to producers are not covered in the Outline of Coverage. That’s why the producer’s responsibility is to disclose their commission at the time of sale and only on new sales (not on renewals). Remember, the producer must maintain on file records related to the commission disclosure for 3 years from the date of sale.

Question 29

When must an insurer offer a long-term care insurance policyholder the option of purchasing inflation protection?
ANever
BAt the time of purchase
CAt the first renewal
DAt each renewal

Answer 29

BAt the time of purchase

Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature.

Question 30

A notice stating that a policy may not cover all long-term care costs incurred must be printed
AIn a box beside the signatures.
BWith the explanation of premium payments.
CAt the bottom of every page of the policy.
DOn the first page of the outline of coverage.

Answer 30

DOn the first page of the outline of coverage.

The first page of the outline of coverage and policy must have a clear display stating, “Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.”