California Life and Health Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the California Life and Health Insurance Exam with our quiz. Review flashcards and multiple choice questions, complete with hints. Ensure your success!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect?

  1. 50%

  2. 75%

  3. 100%

  4. 25%

The correct answer is: 100%

In a noncontributory group health plan, it is essential that all eligible employees participate for the plan to become effective. This requirement ensures that the risk is spread evenly among all participants, which is critical for maintaining the financial stability and actuarial soundness of the insurance plan. When 100% of eligible employees enroll, it minimizes adverse selection—that is, the risk of only unhealthy individuals choosing to participate, which can lead to higher costs for the insurer and, consequently, for all participants. Thus, the requirement for 100% participation is a standard practice in noncontributory plans.

More Questions Like This