What happens if the premium is not paid within the grace period?

• A. COBRA coverage continues
• B. COBRA coverage ends for the affected beneficiary
• C. The plan terminates for all participants
• D. The beneficiary can convert to an individual plan automatically

Answer: (B)

The main idea is that COBRA continuation requires timely premium payments; there is a grace period to allow for late payment. If the premium isn’t paid by the end of that grace period, the individual’s COBRA coverage ends. This protects the rest of the plan from ongoing coverage for someone who hasn’t kept up with payments, and it isn’t an automatic conversion to an individual policy. So the correct result is that COBRA coverage ends for the affected beneficiary.