Wisconsin Accident and Health Insurance Practice Exam

Under COBRA (the Consolidated Omnibus Budget Reconciliation Act), when a qualified beneficiary like Bert experiences a qualifying event, such as the death of a spouse, they are entitled to continuation of health coverage from the employer's group health plan.

The cost for this continued coverage can be passed on to the qualified beneficiary, but there are specific regulations regarding how much can be charged. According to COBRA rules, a qualified plan can charge up to 102% of the total premium cost, which includes the total cost of coverage plus a small administrative fee of up to 2%. This means that while Bert can be responsible for the full premium of the health coverage, the total amount cannot exceed 102% of what the employer pays for active employees.

This regulatory framework ensures that Bert can maintain his health insurance coverage during a pivotal time while also capping the potential financial burden he may face as a result of the qualifying event.