Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client has a group health insurance plan through their employer. After experiencing a qualifying event, they elect to continue their health coverage under COBRA. Which of the following statements about COBRA continuation coverage is TRUE?
- ACOBRA coverage is only available to employees, not their dependents.
- BCOBRA coverage typically lasts for a maximum of 36 months for all qualifying events.
- CIndividuals electing COBRA are responsible for up to 102% of the premium.
- DThe employer usually pays the full premium for COBRA coverage.
Show answer & explanationAnswer & explanation
Correct answer: C. Individuals electing COBRA are responsible for up to 102% of the premium.
Under COBRA, individuals who elect to continue their coverage are responsible for paying the full premium, which can include up to an additional 2% administrative fee, totaling 102% of the cost.
Why the other options are wrong
- A. COBRA coverage extends to employees and their dependents (spouses and dependent children) who were covered under the group plan.
- B. COBRA coverage typically lasts 18 or 36 months, depending on the qualifying event, not always 36 months.
- D. The employer is not required to pay the premium for COBRA; the individual electing coverage is responsible for the cost.
COBRA Continuation Coverage
A federal law that allows eligible employees and their dependents to continue health insurance benefits provided by their group health plan for a limited time after certain qualifying events.
- Applies to employers with 20 or more employees.
- Qualifying events include job loss, reduction in hours, divorce, etc.
- Individuals pay up to 102% of the premium.
Memory trick: COBRA: 'Continue On Benefits, Really Annoying' premiums.