18 Free Texas Group Health & COBRA Practice Questions (2026)
How to Use This Group Health Set
Group Health, Federal Regulation and Texas Statutes common to Life and Health is 18 of the scored questions, and it covers the half of health insurance that is not sold to an individual at all. Employer plans work differently, and federal law sits on top of them in layers — COBRA, HIPAA, ERISA and the ACA each solving a different problem.
COBRA is where the marks are won and lost. The exam rarely asks what COBRA is. It gives you a person, a qualifying event and a date, and expects a number of months — and 18, 29 and 36 are all correct answers to different scenarios.
These 18 questions come from LanePrep's Texas L&H quiz bank and cover how group plans are structured and regulated, COBRA continuation and who qualifies for how long, and the federal and Texas rules that govern what a producer may say, sell and do to stay licensed.
For COBRA, identify the qualifying event first. Termination and reduced hours run one length; divorce, death and a child ageing out run another. The event determines the number.
Practice Questions 1-6: Group Plan Structure, ERISA and HIPAA
How employer coverage is built and who regulates it. Eligibility waiting periods, small-group rules, and the distinction that catches people out: a self-funded plan is governed by federal ERISA rather than by Texas insurance law, so a state remedy may simply not apply.
Question 1 (Chapter 7)
Sarah starts a new full-time job on March 1st. Her employer's group health plan states that new employees are eligible for coverage after completing a 60-day probationary period. Sarah wants to enroll her spouse and children as soon as possible. Assuming she meets all other criteria, when will Sarah and her family typically become eligible to enroll in the employer's group health plan?
- A) Immediately upon her start date, March 1st.
- B) On May 1st, the first day of the month following the completion of her probationary period.
- C) On April 30th, the last day of her probationary period.
- D) During the next annual open enrollment period, regardless of her probationary period.
Show answer & explanation
Answer: B
Group health plans often include a probationary period before an employee becomes eligible. Eligibility typically begins on the first day of the month following the completion of this period. In Sarah's case, a 60-day probationary period from March 1st would end on April 29th. Therefore, eligibility would begin on May 1st. A is incorrect because eligibility is not immediate. C is incorrect because eligibility usually starts on the first of the month after the period ends, not the last day of the period itself. D is incorrect as initial eligibility is separate from annual open enrollment.
Question 2 (Chapter 7)
A small business owner in Texas is exploring options for group health insurance for her 10 employees. She is concerned about one employee who has a pre-existing heart condition. Under the Affordable Care Act (ACA), how must insurers treat this employee regarding pre-existing conditions?
- A) The insurer can impose a waiting period of up to 12 months before covering the pre-existing condition.
- B) The insurer can deny coverage to the employee due to the pre-existing condition.
- C) The insurer cannot deny coverage or charge more due to the pre-existing condition.
- D) The insurer can charge a higher premium for that specific employee due to the increased risk.
Show answer & explanation
Answer: C
A core provision of the Affordable Care Act (ACA) is that health insurance companies cannot deny coverage or charge more money based on health status, including pre-existing conditions. This applies to all individuals, regardless of age. Therefore, the insurer cannot deny coverage or charge more for the employee with the heart condition. Options A, B, and D describe practices that were common before the ACA but are now prohibited.
Question 3 (Chapter 7)
After reviewing a Summary Plan Description (SPD) for his employer's health plan, an employee believes his recent claim was unfairly denied. He wants to understand the formal process for disputing the decision. Which federal act requires group health plans to provide clear claim procedures and is relevant to this situation?
- A) COBRA
- B) HIPAA
- C) ERISA
- D) ACA
Show answer & explanation
Answer: C
The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. It requires plans to provide participants with important information about their plan, including Summary Plan Descriptions (SPDs), and establishes specific claim and appeal procedures for plan participants. While other acts might touch on health plans, ERISA specifically governs the administration and claim procedures of most private employer-sponsored plans. COBRA deals with continuation of coverage, HIPAA with privacy and portability, and ACA with broader market reforms and essential health benefits.
Question 4 (Chapter 7)
A large employer in Texas offers a self-funded group health plan to its employees. When a dispute arises regarding a claim, the employee is informed that the plan is primarily governed by federal law, not state insurance laws. Which federal act typically grants self-funded plans this exemption from state regulation?
- A) The Health Insurance Portability and Accountability Act (HIPAA)
- B) The Consolidated Omnibus Budget Reconciliation Act (COBRA)
- C) The Employee Retirement Income Security Act (ERISA)
- D) The Affordable Care Act (ACA)
Show answer & explanation
Answer: C
Self-funded employee benefit plans, including health plans, are generally exempt from state insurance laws under the Employee Retirement Income Security Act (ERISA). ERISA preempts state laws that 'relate to' employee benefit plans, meaning that self-funded plans are primarily regulated by federal ERISA standards rather than individual state insurance codes. While HIPAA, COBRA, and ACA apply to these plans, ERISA is the specific act that grants the preemption from state insurance regulation for self-funded plans.
Question 5 (Chapter 7)
A medical office manager discusses a patient's treatment plan with a specialist, but accidentally leaves the patient's full name and diagnosis visible on a computer screen in a public waiting area. A visitor takes a photo of the screen. Which federal regulation has most likely been violated in this scenario?
- A) The Affordable Care Act (ACA)
- B) The Employee Retirement Income Security Act (ERISA)
- C) The Health Insurance Portability and Accountability Act (HIPAA)
- D) The Consolidated Omnibus Budget Reconciliation Act (COBRA)
Show answer & explanation
Answer: C
HIPAA, specifically its Privacy Rule, establishes national standards to protect individuals' medical records and other personal health information (PHI). Leaving patient information visible in a public area constitutes a breach of PHI, violating HIPAA. The ACA focuses on health insurance market reforms, ERISA on employee benefit plans, and COBRA on health coverage continuation, none of which directly address the privacy of medical records in this manner.
Question 6 (Chapter 7)
An insurance company in Texas is developing a new health insurance product. They decide to offer a lower premium to individuals who participate in a specific wellness program, which includes regular exercise and healthy eating habits. Is this practice considered unfair discrimination under Texas law?
- A) Yes, because it discriminates against individuals who do not or cannot participate in the wellness program.
- B) No, because differential premiums based on actuarially sound risk factors or health-related behaviors are generally permitted.
- C) Yes, unless the wellness program is offered free of charge to all policyholders.
- D) No, but only if the premium reduction is less than 10% of the standard premium.
Show answer & explanation
Answer: B
Unfair discrimination in insurance generally refers to treating individuals within the same risk class differently without a sound actuarial basis. Offering lower premiums for participation in a bona fide wellness program, which is designed to promote healthier lifestyles and potentially reduce future claims, is typically considered an actuarially sound and permissible practice. It is not considered unfair discrimination if the program is available and the premium differences reflect legitimate risk factors or health-related behaviors. Options A and C are incorrect as such programs are generally allowed. Option D introduces an arbitrary percentage not generally found in discrimination statutes regarding wellness programs.
Practice Questions 7-12: COBRA Qualifying Events and Periods
COBRA in the shapes the exam uses. Termination for anything short of gross misconduct qualifies; divorce, the death of the covered employee, Medicare entitlement and a dependent turning 26 each qualify too, and they do not all run for the same period.
Question 7 (Chapter 7)
After losing his job due to a company layoff, David elected COBRA continuation coverage for himself and his family. Six months into his COBRA coverage, David is diagnosed with a severe disability by the Social Security Administration. How might this diagnosis affect his COBRA continuation period?
- A) His COBRA coverage will immediately terminate due to the disability.
- B) His COBRA coverage will be extended from 18 months to 29 months.
- C) His COBRA coverage will be extended from 18 months to 36 months.
- D) The diagnosis has no impact on his COBRA continuation period.
Show answer & explanation
Answer: B
If a qualified beneficiary is determined to be disabled by the Social Security Administration within the first 60 days of COBRA continuation (or before the end of the 18-month period, under certain conditions), their COBRA coverage can be extended from 18 months to a total of 29 months. This extension is specifically for disability. Option A is incorrect as disability can extend, not terminate, coverage. Option C is incorrect; 36 months is for other qualifying events like divorce or loss of dependent status, not disability. Option D is incorrect as disability can indeed impact the period.
Question 8 (Chapter 7)
Linda was fired from her job for excessive tardiness — not gross misconduct. She had been covered under her employer's group health plan. Linda elects COBRA continuation coverage. Absent other qualifying events or disability, what is the maximum continuation period available to her?
- A) 12 months
- B) 18 months
- C) 29 months
- D) 36 months
Show answer & explanation
Answer: B
Termination of employment for reasons OTHER than gross misconduct triggers an 18-month COBRA continuation period. Excessive tardiness alone is generally not considered gross misconduct. 29 months requires a disability determination; 36 months applies to events like death, divorce, or a dependent aging out.
Question 9 (Chapter 7)
Mark was covered under his employer's group health plan. He recently divorced his spouse, Lisa, who was also covered under his plan as a dependent. Lisa is now seeking to continue her health coverage through COBRA. For how long is Lisa typically eligible to continue her coverage under COBRA due to this qualifying event?
- A) 18 months
- B) 29 months
- C) 36 months
- D) 12 months
Show answer & explanation
Answer: C
Under COBRA, certain qualifying events allow dependents to continue coverage for specific periods. Divorce is a qualifying event for a former spouse, allowing for a continuation period of up to 36 months. 18 months typically applies to termination of employment or reduction in hours. 29 months applies if a qualified beneficiary is determined to be disabled within 60 days of the COBRA event. 12 months is not a standard COBRA continuation period.
Question 10 (Chapter 7)
Tom is the covered employee under his employer's group health plan. He dies suddenly, leaving his wife and two minor children as dependents on the plan. The family wishes to continue coverage under COBRA. What is the maximum COBRA continuation period available to the surviving dependents?
- A) 18 months
- B) 24 months
- C) 29 months
- D) 36 months
Show answer & explanation
Answer: D
Death of the covered employee is a qualifying event that allows surviving dependents to continue COBRA coverage for up to 36 months. The 18-month period applies only to termination/reduced hours; 29 months requires a Social Security disability determination.
Question 11 (Chapter 7)
Rachel becomes entitled to Medicare (Medicare entitlement of the covered employee). Her spouse Greg, age 60, was a dependent on her group health plan. Greg now needs to continue coverage through COBRA. What is the maximum COBRA continuation period available to Greg as a result of Rachel's Medicare entitlement?
- A) 18 months
- B) 29 months
- C) 36 months
- D) COBRA is unavailable because Medicare entitlement is not a qualifying event.
Show answer & explanation
Answer: C
When the covered employee becomes entitled to Medicare, the dependents may continue COBRA for up to 36 months. This is one of the categories of qualifying events that triggers the longer 36-month period rather than the standard 18-month one.
Question 12 (Chapter 7)
Aisha's son, Daniel, has been covered under her group health plan as a dependent. Daniel turns 26 and ages out of the plan under ACA rules. Daniel wants to continue group coverage temporarily through COBRA. What is the maximum COBRA continuation period available to Daniel due to this qualifying event?
- A) 12 months
- B) 18 months
- C) 29 months
- D) 36 months
Show answer & explanation
Answer: D
A dependent child losing dependent status under the plan's rules (e.g., aging out at 26) is a qualifying event that triggers a 36-month COBRA continuation period — not 18 months. The 18-month period applies to the employee's own termination or reduced hours.
Practice Questions 13-18: ACA, Texas Licensing and Producer Conduct
The rules a producer works under. ACA dependent coverage and the ban on annual and lifetime limits for essential health benefits, Texas continuing education and renewal requirements, and the conduct rules — rebating and misleading advertising — that apply however willing the client is.
Question 13 (Chapter 7)
Under the Affordable Care Act (ACA), which of the following is a key provision regarding dependent coverage on a parent's health insurance plan?
- A) Dependents can remain on a parent's plan until age 21, or 23 if a full-time student.
- B) Dependents can remain on a parent's plan until age 26, regardless of student status or marital status.
- C) Dependents must be financially dependent on the parent to remain on their plan beyond age 18.
- D) Dependent coverage is only available if the dependent has a qualifying disability.
Show answer & explanation
Answer: B
A key provision of the ACA is that health plans must allow young adults to stay on their parents' health insurance plans until they turn 26 years old. This applies regardless of whether they are married, living with their parents, financially dependent on their parents, or students. Options A, C, and D describe rules that existed prior to or are not consistent with the ACA's dependent coverage provision.
Question 14 (Chapter 7)
Under the Affordable Care Act (ACA), what is generally true regarding annual and lifetime limits on Essential Health Benefits (EHBs) for most health plans?
- A) Plans can impose annual limits but not lifetime limits on EHBs.
- B) Plans can impose lifetime limits but not annual limits on EHBs.
- C) Plans are prohibited from imposing annual or lifetime limits on EHBs.
- D) Plans can impose both annual and lifetime limits on EHBs, but only if disclosed to the policyholder.
Show answer & explanation
Answer: C
A key consumer protection under the ACA is the prohibition against annual and lifetime dollar limits on Essential Health Benefits (EHBs) for most health plans. This ensures that individuals with significant medical needs do not run out of coverage for necessary services. Options A, B, and D are incorrect as they contradict this fundamental ACA provision.
Question 15 (Chapter 7)
A Texas insurance producer, licensed for Life & Health, is approaching their biennial license renewal. To maintain their license, what are the minimum continuing education (CE) requirements they must meet under current TDI rules?
- A) 24 hours of CE every 2 years, including 2 hours of ethics.
- B) 24 hours of CE every 2 years, including 3 hours of ethics.
- C) 40 hours of CE every 2 years, with no specific ethics requirement.
- D) No CE is required if the producer has been licensed for over 10 years.
Show answer & explanation
Answer: B
Under current TDI rules, Texas licensed insurance producers must complete 24 hours of CE every two-year license period, including at least 3 hours of ethics. Effective September 2022, the ethics minimum was raised from 2 hours to 3 hours, so Option A is the classic trap distractor reflecting the OLD rule — many older study materials still cite 2 hours. Option C confuses CE with the pre-licensing requirement (which applies only to the temporary-license pathway, not permanent licensure). Option D is wrong because CE is required at every renewal regardless of years licensed.
Question 16 (Chapter 7)
Maria is renewing her Texas General Lines Life & Health license in October 2026. Her CE compliance manager tells her she needs 24 hours of CE every two years, including some ethics hours. Maria remembers an older textbook stating ethics was only 2 hours. Under the rule that took effect in September 2022, what is the minimum ethics requirement Maria must satisfy?
- A) 2 hours of ethics (the old rule still applies if you were licensed before September 2022).
- B) 3 hours of ethics within the 24-hour biennial CE requirement.
- C) 4 hours of ethics within the 24-hour biennial CE requirement.
- D) No ethics hours are required if she completes 24 hours of other approved CE.
Show answer & explanation
Answer: B
Effective September 2022, Texas raised the ethics CE requirement from 2 hours to 3 hours within the biennial 24-hour CE total. Option A is a common distractor — the old 2-hour rule is no longer current. C and D are simply incorrect.
Question 17 (Chapter 7)
An insurance producer offers a prospective client a $100 gift card to a popular retail store if they purchase a new health insurance policy through them. The gift card is not mentioned in the policy terms or any official marketing materials. Which Texas Unfair Trade Practice is the producer committing?
- A) Misrepresentation
- B) Twisting
- C) Rebating
- D) Defamation
Show answer & explanation
Answer: C
Rebating is the practice of offering anything of value not specified in the insurance contract as an inducement to purchase a policy. Offering a gift card as an incentive falls directly under this definition. Misrepresentation involves making false statements. Twisting involves inducing a policyholder to replace a policy to their detriment. Defamation involves making false statements about another insurer. Therefore, offering the gift card is an act of rebating.
Question 18 (Chapter 7)
A health insurer's advertisement in Texas states, 'This health plan is an investment in your future, guaranteeing financial returns on your medical expenses!' Which Texas advertising regulation or prohibited practice is this advertisement most likely violating?
- A) Misrepresentation, by using the term 'investment' in connection with a health plan.
- B) Unfair discrimination, by implying financial returns.
- C) Twisting, by encouraging replacement of other plans.
- D) Rebating, by offering a financial incentive.
Show answer & explanation
Answer: A
Texas advertising regulations, like those of many states, prohibit the use of terms like 'investment,' 'return,' 'profit,' 'deposit,' or 'savings' in connection with health insurance policies. These terms can be misleading as health insurance is designed to provide coverage for medical expenses, not to generate financial returns or act as an investment vehicle. Therefore, using 'investment' and 'guaranteeing financial returns' constitutes misrepresentation. The other options do not fit the specific nature of the violation.
The Group Health Mistakes That Cost Marks
Using 18 months for every COBRA question. Eighteen is termination or reduced hours. Divorce, death of the covered employee and a dependent ageing out run longer, and a disability extension changes it again. The qualifying event is the question.
Applying Texas insurance law to a self-funded plan. Self-funded employer plans are governed by ERISA and largely preempt state insurance regulation. A question that mentions self-funding is telling you the state remedy does not apply.
Treating a small gift as outside the rebating rules. A gift card offered in exchange for buying a policy is rebating. The size does not rescue it, and neither does the client's enthusiasm.
Guessing the Texas CE hours. Continuing education and renewal requirements are state-specific and study guides disagree. Texas sets its own hours and its own ethics component, and the exam asks for the Texas numbers.
All nine chapters are audio lessons — chapter 1 is free, no signup. The Texas-specific statutes sit in the Texas L&H insurance law set, and individual coverage in the health insurance set.
Question counts and content weighting come from the Pearson VUE Texas examination content outline. Read September 2026.
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