Under COBRA, after a qualifying event occurs, the plan administrator is required to:

Why B is correct

COBRA requires the plan administrator to give qualified beneficiaries written notice of their right to elect continuation coverage when a qualifying event occurs, such as termination of employment or reduction in hours. The notice explains the coverage, the premium, and the election deadline. Continuation coverage is not automatic; the qualified beneficiary must affirmatively elect it within the statutory election period. The notice requirement is fundamental to making the COBRA right meaningful. The COBRA notice structure has two parts: a general notice provided at enrollment and an election notice provided within 14 days of the plan administrator being notified of a qualifying event. The election notice must identify the coverage available, the premium, and the 60-day window, and the beneficiary's coverage is retroactive to the date of the qualifying event once elected.

Why the other options are wrong

• C) COBRA coverage is not automatic; the qualified beneficiary must elect continuation coverage within the allowed window. The election notice must be provided to each qualified beneficiary, because dependents hold separate COBRA rights that cannot be waived by the employee alone.
• D) COBRA requires notice of the right to continue coverage; coverage is not cancelled unless the beneficiary fails to elect or pay. COBRA requires written notice; an oral explanation does not satisfy the statute's documentation and timing requirements.
• A) Notices are required to reach the qualified beneficiary, not only the employer. Continuation coverage is not automatic: the qualified beneficiary must elect it within 60 days, and the administrator must then provide the required information.

Memory hook

COBRA works only if you know you have it: the plan must send the election notice before the clock runs.