COBRA Compliance for Companies with 20+ Employees
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Questions and Answers

What is the primary reason most employees do not elect COBRA?

  • Employers discourage employees from electing COBRA.
  • COBRA is expensive and employees have to bear the full cost. (correct)
  • They are not eligible for COBRA benefits.
  • It is a very time-consuming process to enroll in COBRA.
  • How can employers avoid steep penalties related to COBRA?

  • By informing departing employees about COBRA benefits informally.
  • By delaying the formal notification about COBRA rights to departing employees.
  • By outsourcing COBRA administration to specialized companies. (correct)
  • By not offering COBRA to departing employees.
  • What is the key responsibility of employers regarding COBRA enrollment?

  • To delay notifying employees about their COBRA rights.
  • To cover all COBRA costs for departing employees.
  • To ensure departing employees understand the COBRA enrollment process. (correct)
  • To discourage employees from electing COBRA benefits.
  • What happens to the cost of health insurance premiums for employees when employment ends and they elect COBRA?

    <p>The employee is now responsible for 100% of the premium plus a 2% administrative fee.</p> Signup and view all the answers

    What must the employer (or TPA) do when a plan member or dependent loses their plan eligibility and wishes to participate in COBRA?

    <p>Send the member notice of their COBRA eligibility and the full premium amount.</p> Signup and view all the answers

    What is required for a plan member to continue benefits under COBRA?

    <p>Submitting a COBRA enrollment form and paying premium + 2% administrative fee.</p> Signup and view all the answers

    What does the plan administrator do with the 2% administrative fee in the COBRA process?

    <p>Keeps it as revenue</p> Signup and view all the answers

    If a member notifies the administrator to terminate COBRA, what action does the administrator take?

    <p>Notifies the insurance carrier to discontinue coverage</p> Signup and view all the answers

    In what situations might an employer offer COBRA to employees?

    <p>When required by law</p> Signup and view all the answers

    What is a common practice for employers in handling their COBRA benefits?

    <p>Contracting with a third-party administrator (TPA)</p> Signup and view all the answers

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