Utah General Contractors - Business and Law Practice Exam

What does COBRA allow qualified beneficiaries to do after a qualifying event?

1. Transfer to a different employer's plan

2. Maintain health coverage at their own cost

3. Receive free health care services

4. Obtain additional health insurance coverage

The correct answer is: Maintain health coverage at their own cost

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a law that enables individuals who have experienced a qualifying event—such as job loss, reduction in hours, or other significant life changes—to maintain their group health insurance coverage for a limited time. This is especially important because it provides a safety net for those who may suddenly find themselves without health coverage while they seek new employment or address the changes in their life situation. The key feature of COBRA is that it allows qualified beneficiaries to continue their health insurance coverage at their own expense, meaning they must pay the full premium, which can include the portion that their employer used to cover, as well as an administrative fee. This option is crucial as it helps individuals avoid lapses in coverage that could lead to significant financial burdens due to medical expenses. In contrast, transferring to a different employer’s plan or receiving free health care services are not provisions offered under COBRA, nor does it provide a pathway to obtaining additional insurance coverage outside of what is already offered through the previous employer’s group plan.