Does COBRA apply to a buy-down MERP?

[J Simmons]

Situation. ER has 45 employees and a $500 annual deductible group health insurance policy, with 20% co-insurance responsibility of the covered EE and $10,000 maximum out of pocket.

The ER is switching to a $10,000 annual deductible group health insurance policy. So that the EE is in the 'same position, the ER will be instituting a buy-down MERP that has a $500 annual dedutible. ER will pay 80% of dollars $501-$9,999 for the year. Then the insurance kicks in. Once the EE hits $10,000 paid out of pocket under the MERP and the insurance, the ER will then pay any additional co-insurance for the EE.

The new, $10,000 annual deductible group health insurance coverage is subject to COBRA, and will be administered by the insurance company.

Two questions:

1-Inasmuch as COBRA applies to the $10,000 annual deductible group health insurance policy, does COBRA also apply to the buy-down MERP?

2-If COBRA does apply to the buy-down MERP, how would the 'premium' cost for COBRA-continued coverage under the buy-down MERP be determined?