How Much Must an Employee Pay in Order to Continue

question 57

Multiple Choice

How much must an employee pay in order to continue health benefits under COBRA?

• A) One half the policy premiums.
• B) All the policy premiums, plus up to a 5 percent administrative fee.
• C) Only whatever percentage of policy premiums the employee paid prior to leaving the job.
• D) All the premiums, plus up to a 2 percent administration fee.
• E) Nothing because the employer must cover all premiums.

---

Definitions:

Collection on Account

This term refers to the payment received by a business from its customers against the outstanding invoices or credits.

Journal Entry

A record in the accounting ledger that represents a single transaction and its effects on various accounts, detailing debits and credits.

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account information related to a specific master ledger account.

Allowance Account

An account used in accounting to estimate and offset losses that may arise from receivables that are not likely to be collected.