What is required regarding premium payments under COBRA?

• A. Premiums are optional
• B. Premiums must be timely and the plan keeps records of payments
• C. Premiums are paid by the plan sponsor only
• D. Premiums are sent to the IRS

Answer: (B)

Premium payments are required to maintain COBRA coverage. When someone elects COBRA, they must pay the monthly premium to the plan administrator (or insurer) in a timely manner. The plan is responsible for keeping records of who has paid and when payments are received, so it can verify ongoing eligibility and enforce the payment rules. Premia are not optional, and they are not sent to the IRS; the payments go to the plan administrator or insurer. A typical grace period allows a short window after the due date for payment, but failing to pay within that period can terminate COBRA coverage.