17 Free Utah Life & Health Practice Questions: Group Health and Dental (2026)

Answer: B

A debtor group consists of individuals who incur a debt to a creditor (such as a bank) and are offered insurance coverage related to that debt, such as credit life or credit disability insurance. This is explicitly defined in Utah insurance regulations as an eligible group type. Options A, C, and D describe other eligible group types (employer-employee, labor union, and trust groups) that do not fit this creditor-debtor relationship.

Answer: D

Trust groups allow multiple small employers to pool their employees into a single group for insurance purposes, enabling experience rating based on the combined claims experience of the trust. This helps stabilize premiums and improve risk spreading, which is a key benefit under Utah group insurance regulations. The trust does not exempt members from state benefit mandates (A), federal tax credits (B) are not tied to trust formation, and COBRA (C) still applies to each employer individually based on their employee count.

Answer: D

A group sponsored by a labor union to provide benefits to its members, regardless of which employer they work for, is classified as a labor union group under Utah insurance regulations. This is distinct from employer-employee groups (tied to a single employer), trust groups (formed by employers), and association groups (typically professional or trade associations). The scenario specifically describes a union as the sponsor, making D the correct choice.

Answer: B

Under Utah Code Section 31A-22-501, a master contract is issued to the group sponsor (e.g., employer), and each member receives an individual certificate of insurance as proof of coverage. The master policy (A) is held by the sponsor, not issued to individuals. The group application (C) is used to obtain coverage but is not proof of insurance. The summary of benefits and coverage (D) is a disclosure document required under federal law but does not serve as the legal certificate of insurance under Utah statute.

Answer: B

For small groups (2–50 employees) in Utah, premiums may vary based on the group's claims experience (experience rating), allowing lower premiums for groups with favorable experience. Only experience-based rate adjustment (B) is permitted under Utah's small group market rules.

Answer: B

The description of a plan with a provider network, deductible, and coinsurance is typical of a fully insured arrangement where the insurer assumes the risk.

Answer: D

In a self-funded (or administrative-services-only) arrangement, stop-loss insurance protects the employer against catastrophic claims by reimbursing them for medical expenses that exceed a predetermined threshold (attachment point). It does not pay routine claims (A), which remain the employer's responsibility. Claims administration (B) is typically handled by a third-party administrator, not the stop-loss carrier. Stop-loss does not confer guaranteed issue (C), which is a characteristic of fully insured small group markets under Utah and federal law.

Answer: A

A self-funded plan allows the employer to pay claims directly and retain control of funds. Adding specific stop-loss insurance reimburses the employer for individual claims that exceed a threshold, protecting against large claims. A fully insured plan transfers risk to the insurer. ASO without stop-loss retains all risk. An association trust is a group type, not a funding arrangement.

Answer: C

For an association to be eligible for group insurance under Utah law, it must be formed for purposes other than obtaining insurance, such as promoting the profession. Options A, B, and D describe functions that would invalidate the association group status.

Answer: A

A trust group under Utah law is formed when two or more employers join together to purchase group health insurance collectively, often to achieve better rates or administrative efficiency. This is distinct from employer-employee (single employer), union, association, or debtor groups.

Answer: A

When an employer pays claims directly from its own funds and uses a TPA only for administrative services (like claims processing and network access), it is a self-funded plan with an ASO arrangement. This differs from fully insured (where the insurer assumes risk) and is not defined by the group type (trust or association).

Answer: C

Utah follows standard group insurance underwriting guidelines where a minimum participation rate of 75% of eligible employees is typically required to prevent adverse selection—the scenario where only sicker individuals enroll, destabilizing the risk pool. While exact percentages can vary by case and insurer, 75% is the standard benchmark cited in Utah's regulatory framework and industry practice for group health plans. Options A and B are too low to effectively mitigate adverse selection, and D is impractical and not required by law.

Answer: D

D is correct. A trust group is formed when two or more small employers join together through a trust to buy group health insurance collectively, spreading risk and increasing purchasing power. A describes a single-employer group, B a labour-union group, and C a creditor group used for credit insurance.

Answer: B

Aggregate stop-loss coverage reimburses the employer when total claims exceed a specified percentage of expected claims. Here, the attachment point is 125% of $800,000 expected claims, which equals $1,000,000. The stop-loss insurer begins to pay after the employer has paid $1,000,000 in claims. Option A is incorrect because it uses 100% of expected claims. Option C incorrectly calculates 125% as $1,250,000 (which would be 125% of $1,000,000). Option D uses 200% of expected claims.

Answer: D

For small employer groups (2–50 employees) in Utah, health status-based rating is prohibited under state and federal law (including HIPAA and the ACA). Premiums cannot vary based on the medical conditions or health status of group members. Experience rating (A) is permitted within federal limits, age rating (B) is allowed with restrictions, industry classification (C) may be used in some rating models, and uniform rates (E) are permissible but not required. Only health status-based variation is explicitly prohibited.

Answer: B

For an association to be eligible as an association group for health insurance under Utah law, it must primarily exist to promote a common profession or interest and provide services to its members, not to sell insurance. Insurance must be a secondary benefit. Option A is incorrect because if providing insurance is the main activity, the association is not eligible. Option C is incorrect as there is no minimum membership requirement specified in Utah law for association groups. Option D is incorrect as associations are typically non-profit entities, and for-profit incorporation would disqualify them.

Answer: A

First, subtract the deductible from the total expenses: $5,000 - $1,000 = $4,000. Then, apply the coinsurance: the plan covers 80% of the remaining amount, so 0.80 × $4,000 = $3,200. Option B is incorrect as it represents 80% of the total expenses without subtracting the deductible. Option C is incorrect as it represents the total expenses minus the deductible (the amount before coinsurance is applied). Option D is incorrect as it equals the total expenses, ignoring both the deductible and coinsurance.