PENALTIES FOR NON-COMPLIANCE
Making benefits available to COBRA beneficiaries is a vital, legal compliance requirement. Continuation of benefits for COBRA participants must be managed according to Federal guidelines in order to avoid penalties for noncompliance. We understand the importance of managing each step from the initial COBRA notice to newly enrolled employees to the early termination notice to COBRA participants.
Internal Revenue
- Nondeductible excise tax of up to $100 per day per violation for each qualifying beneficiary (i.e., family of four would result in an excise tax of $400 per day) during the noncompliance period.
- Employer contributions for the plan are disallowed
ERISA Violations
- Violations before 7/29/97: up to $100 per day per violation
- Violations after 7/29/97: up to $110 per day per violation
- Other judgments, costs or damages
- Audit and/or enforcement action by Department of Labor
Public Health Services Act Violations
- Applicable to state and local governments
- Action for "appropriate equitable relief"
Private Lawsuits Against Employers and Plans
- Employers can be liable for payment of health care claims and fines