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

• A. Coverage continues for another 6 months.
• B. The premium is reduced.
• C. The beneficiary is offered a different plan.
• D. COBRA coverage may be terminated for nonpayment.

Answer: (D)

The key idea is how the COBRA grace period works for premium payments. When you elect COBRA, you must pay your monthly premium, but the plan gives a grace period after the due date so you can make the payment without losing coverage. If the premium isn’t paid by the end of that grace period, the plan administrator may terminate COBRA coverage for nonpayment. In other words, nonpayment within the grace period ends your COBRA coverage, rather than extending it or changing it to a different plan. The other options don’t fit because they describe temporary extensions, reductions, or plan swaps that aren’t triggered by missing a payment within the grace period.