1. Under COBRA, the maximum premium that may be charged to a qualified beneficiary is
Answer: B
Under COBRA, the maximum premium that may be charged to a qualified beneficiary is 102% of plan cost.
Under COBRA regulations, a qualified beneficiary can be charged a maximum premium of 102% of the cost of the plan. This includes the total cost of coverage plus a 2% administrative fee.
A) 100 % of plan cost
This option is incorrect because COBRA allows for a premium that exceeds the plan cost. While beneficiaries may expect to pay the standard premium, the law permits an additional charge to cover administrative costs.
B) 102 % of plan cost
This option is correct as it aligns with COBRA provisions, which state that the maximum premium a qualified beneficiary can be charged is 102% of the total plan cost, allowing for a small administrative fee.
C) 105 % of plan cost
This option is incorrect because it exceeds the maximum allowable premium under COBRA. The law clearly limits the charge to 102% of the plan cost, making 105% not compliant with the regulations.
D) 110 % of plan cost
This option is also incorrect as it far exceeds the maximum premium cap set by COBRA. The statute does not permit any charges beyond 102% of the plan cost, thus making this option invalid.
Conclusion
The correct answer is 102% of the plan cost, as dictated by COBRA regulations. All other options fail to meet the legal requirements established under COBRA, which specifically caps the premium that can be charged to qualified beneficiaries.