Under COBRA, an employee who loses their job may remain insured for 18 months by paying what percentage of the actual group rate?

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Study for the Minnesota Life Accident and Health Producer Exam. Prepare with flashcards and multiple choice questions with hints and explanations. Get ready for your exam!

Multiple Choice

Under COBRA, an employee who loses their job may remain insured for 18 months by paying what percentage of the actual group rate?

Explanation:
COBRA continuation coverage lets an employee keep the group health plan for up to 18 months, but the cost isn’t just the premium. The rule is to charge the actual group rate plus a 2% administrative fee, totaling 102% of the group rate. The 2% covers the plan’s costs to administer the COBRA coverage. So paying 100% would omit the admin fee, paying 120% would exceed the allowed amount, and paying 90% would be a discount not provided by COBRA. The correct amount is 102% of the actual group rate.

COBRA continuation coverage lets an employee keep the group health plan for up to 18 months, but the cost isn’t just the premium. The rule is to charge the actual group rate plus a 2% administrative fee, totaling 102% of the group rate. The 2% covers the plan’s costs to administer the COBRA coverage. So paying 100% would omit the admin fee, paying 120% would exceed the allowed amount, and paying 90% would be a discount not provided by COBRA. The correct amount is 102% of the actual group rate.

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