Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), what limitations exist on a terminated employee's benefits?

The correct answer highlights a crucial aspect of the Consolidated Omnibus Budget Reconciliation Act (COBRA), which provides specific protections for employees who lose their health insurance coverage due to certain qualifying events, including job termination. Under COBRA, the law stipulates that individuals eligible for continuation coverage must retain the same health benefits they previously enjoyed. This means that their benefits cannot be reduced by the insurer during the COBRA coverage period.

Furthermore, the premiums that individuals are required to pay for this continued coverage can be no more than 102% of the cost to the plan for similarly situated employees. This provision ensures that while the coverage continues, the cost remains manageable and does not exceed a reasonable threshold, allowing terminated employees to maintain access to necessary health care services without facing prohibitive costs.

The other choices present scenarios that do not align with the protections offered by COBRA, such as losing all benefits upon termination or having benefits reduced, and they do not accurately reflect the provisions set out in the law regarding coverage duration or limitations. Thus, understanding these COBRA provisions is essential for both employees navigating health insurance options after employment and employers managing benefits compliance.