Q: My client has inquired about an annual 3% premium rate cap for cobra . Everything I'm reading tells me there wouldn't be any type of premium cap enforced because the cost of healthcare continues to increase where naturally the premium for cobra would increase if the group health plan premium increased. Can you confirm there is no law stating an employer can only raise their cobra premium by 3% annually?
A: There is no law that states a cap on COBRA, The cost of COBRA may be increased if the cost to the group health plan increases. However, the costs must be fixed in advance of each 12 month premium cycle.