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Insurance · Policy Provisions

What does COBRA generally allow in the context of group health insurance?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

It generally allows eligible employees and dependents to continue group health coverage for a limited period after a qualifying event (such as job loss), usually by paying the full premium themselves

  1. A It cancels coverage at termination
  2. B It applies only to individual policies
  3. C It provides free lifetime coverage
  4. D It generally allows eligible employees and dependents to continue group health coverage for a limited period after a qualifying event (such as job loss), usually by paying the full premium themselves

Why this is the answer

COBRA (the federal Consolidated Omnibus Budget Reconciliation Act) generally allows eligible employees and their covered dependents to temporarily continue their group health coverage after a qualifying event — such as job loss, reduction in hours, or certain family changes — that would otherwise end the coverage. The continued coverage typically lasts for a limited period (commonly up to 18 months, longer in some situations), and the individual usually must pay the entire premium, including the portion the employer previously paid, plus a small administrative fee. COBRA applies to employers of a certain size. Understanding COBRA's continuation purpose and its limited duration and full-premium cost is standard content.
Source: NAIC Model Outline, COBRA

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About this topic: Policy Provisions

Policy provisions questions cover the Uniform Individual Accident and Sickness Policy Provisions — grace period, reinstatement, time limit on certain defences, claims procedures — and the optional provisions. This is one of 13 Health Insurance questions on policy provisions, each with a full explanation on a single study page.

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

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