What is COBRA designed to do?

• A. Provide tax credits for small businesses
• B. Temporarily continue health coverage after loss due to qualifying events
• C. Fund health savings accounts
• D. Extend retirement benefits automatically

Answer: (B)

COBRA is about keeping your existing employer-sponsored health coverage for a limited time after you lose it due to a qualifying event. You stay in the same plan, but you pay the full premium (plus a small admin fee). The usual continuation period is 18 months, with possible extensions up to 36 months in certain cases (such as disability or other qualifying events). This option gives you stability while you transition to other coverage options, rather than providing tax credits, funding HSAs, or automatically extending retirement benefits.