High water alarm, when triggered, does it also turn on bilge water pump? or its only an alarm...

Mine doesn't have an alarm, try filling bilge from hose until alarm sounds, is the bilge pump going?

generally the bilge pumps are wired hot and the when the water level rises it triggers the micro switch to turn on the pump

There are 2 float switches, one next to pump which turns on when a few inches of water and then 2nd float switch few inches above 1st one which triggers alarm but not pump, is this normal? what is the Coast Guard requirement? My boat needs to do a Coast Guard inspection

Yes this is the correct setup. you don't want the alarm going off every time the bilge pump runs...

If you have an auto pump, make sure there is no oil in the bilge. Those coasties will have your nuts for discharging oil in S. Florida.