Are preexisting-condition exclusions applicable to COBRA continuation?

• A. They never apply to COBRA
• B. They apply to COBRA only if the beneficiary is under 26
• C. COBRA continuation uses the underlying plan's terms; if preexisting-condition exclusions exist for active participants, they may apply to COBRA in the same way
• D. They automatically exclude coverage for preexisting conditions

Answer: (C)

COBRA continuation isn’t a separate new policy; it carries over the terms of the underlying health plan. Because of that, any preexisting-condition exclusion that exists for active participants in the plan can also apply to someone who elects COBRA. If the plan imposes a period during which coverage for a preexisting condition is not provided, that same exclusion and timing apply to the COBRA participant as well. If the underlying plan has eliminated such exclusions, then COBRA follows that as well.

So the correct idea is that COBRA continuation uses the same terms as the underlying plan, including any preexisting-condition exclusions. The other options aren’t correct because age isn’t the determining factor for these exclusions, exclusions aren’t automatically imposed regardless of plan terms, and COBRA does not create new protections that universally neutralize preexisting-condition exclusions.