COBRA Employer Responsibilities and Penalties


COBRA: Employer Responsibilities and Penalties

Cobra Employer Responsibilities:

Some of the Employer responsibilities are:
  • Notify employees and covered spouses of their COBRA Rights when they first become covered under the employer's health plan(s).

  • Notify employees and/or covered dependents, within 14 days of the COBRA Qualifying Event date, of their ability to elect COBRA continuation of coverage and provide election forms.

  • Maintain records to prove notifications were sent within their specified timeframes.

  • Track COBRA election periods and length of coverage.

  • Invoice COBRA premium payments and balance bill short payments.

  • Maintain payment records and correspondence.

  • Notify COBRA continuants of benefit changes and any open enrollment periods.

  • Allow COBRA continuants the ability to add dependents, increase coverage, or change plans as "similarly situated" active employees are allowed to do.

  • Notify active COBRA continuants of their conversion rights, if any, within 180 days of their projected COBRA coverage termination date.

  • Notify COBRA continuants when their COBRA coverage has terminated.

  • Maintain written procedures for COBRA administration.

Cobra: Employer Penalties

Penalties for non-compliance with COBRA can result in

  • IRS excise tax penalty of $100 per day for each violation. This fine can be increased to $200 for each day in which there was more than one Qualified Beneficiary per family.

  • An ERISA penalty of $110 per day payable to each Qualified Beneficiary for each day the employer was not in compliance.

  • The employer can be held liable for payment of legal fees, court costs and even for medical claims incurred by a Qualified Beneficiary.

Resources for the Uninsured

Even if you have had no success in finding health coverage, have hope! There are some resources for the uninsured which you may find helpful, including prescription drug assistance programs and affordable fixed-priced benefit plans regardless of age or health issues.

Prescription Drug Assistance

You or your family uninsured or without benefits?

COBRA Employer Responsibilities and Penalties
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