What additional cost can an employer add to COBRA premiums they no longer pay?

The appropriate answer is the option that indicates an employer can add a 2% charge for administrative costs to COBRA premiums. Under COBRA (Consolidated Omnibus Budget Reconciliation Act), employers are required to offer continuation of health coverage, but they are allowed to charge former employees up to 102% of the premium cost to cover both the full premium and a small administrative fee.

This 2% increase is specifically designated for administrative costs associated with managing the COBRA continuation coverage. It is a standard practice that allows employers to recoup some of the expenses incurred in the administration of the COBRA program while remaining compliant with federal regulations.

The larger percentage increases mentioned in other options, such as 5% or 10%, are not permissible under the COBRA guidelines set forth by the Department of Labor, which specifically restrict the additional charges to 2% for administrative overhead. Thus, the correct understanding hinges on the employer's ability to include this reasonable administrative cost while complying with the mandates of COBRA.