Under COBRA, how much of the active-employee cost for continued coverage may be charged to a beneficiary like Bert?

Under COBRA (Consolidated Omnibus Budget Reconciliation Act), beneficiaries like Bert can be charged a maximum of 102% of the active-employee cost for continued health coverage. This provision is designed to allow individuals who would otherwise lose their health insurance benefits due to certain qualifying events (such as job loss or reduction in hours) to maintain their medical coverage for a limited period.

The additional 2% over the active-employee cost accounts for administrative expenses associated with providing the continuation coverage. It’s important to know that the maximum coverage period under COBRA can be up to 18 months, but this can extend up to 36 months depending on circumstances.

This structure ensures that while former employees face higher costs under COBRA, they still have the option to retain their health insurance during a transitional period, which is essential for many individuals in situations of unemployment or change in employment status.