Under COBRA, the maximum premium that may be charged to a qualified beneficiary is

Rationale

Under COBRA, the maximum premium that may be charged to a qualified beneficiary is 102% of plan cost.

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the law allows employers to charge qualified beneficiaries up to 102% of the total premium costs for continued health coverage. This includes a 2% administrative fee that can be added to the standard premium.

A (100 % of plan cost) YOUR ANSWER

Charging 100% of the plan cost does not include the additional 2% administrative fee allowed under COBRA. Therefore, this option fails to reflect the maximum premium that can be charged to beneficiaries who elect to continue their coverage after leaving employment.

B (102 % of plan cost) CORRECT

This option accurately reflects the provisions of COBRA, which permits employers to charge up to 102% of the total premium cost. This amount includes the full premium plus a 2% charge for administrative expenses, aligning with the legal requirements of COBRA.

C (105 % of plan cost) YOUR ANSWER

A premium charge of 105% exceeds the legal limit set by COBRA. This option incorrectly suggests a higher charge than what is permissible, which would not comply with the regulations governing continuation coverage.

D (110 % of plan cost) YOUR ANSWER

Similar to option C, charging 110% of the plan cost also surpasses the maximum allowable amount under COBRA. This option misrepresents the law by implying an unjustifiably high premium rate that is not permitted.

Conclusion

COBRA establishes specific guidelines for the premiums that may be charged to qualified beneficiaries to ensure they can maintain their health coverage after employment ends. The maximum permissible premium is 102% of the plan cost, which includes the necessary administrative fee. Options that suggest lower or higher premiums do not conform to COBRA regulations and misrepresent the legal framework surrounding continuation coverage.

Under COBRA, the maximum premium that may be charged to a qualified beneficiary is

Under COBRA, the maximum premium that may be charged to a qualified beneficiary is 102% of plan cost.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test