When it comes to the Consolidated Omnibus Budget Reconciliation Act of 1985, also known as COBRA, what employers don’t know really can hurt them.
COBRA is a complex topic and as we’ve seen in the courts, employers can be tied up in litigation for years and pay hefty fines for miscalculating the importance of following regulations.
In addition to being liable for civil and equitable damages and attorney’s fees and expenses, companies could also be subject to ERISA penalties of $110/day and a $100 daily excise tax from the IRS. That’s on top of the cost of litigation.
In the often cited case of Mlsna vs. Unitel, the award given to the plaintiff totaled over $130,000 and included 6 years of retroactive daily fines for a COBRA notification violation totaling over $45,000.
Don’t worry. You just need to trust the experts when it comes to COBRA administration.
In our experience working with companies to administer a COBRA plan to their populations, we have seen first-hand the positive impact of correctly understanding COBRA guidelines on topics like:
- How many employees does it take to be required to provide a COBRA plan?
- Who is eligible to receive COBRA coverage and for how long?
- What information needs to be included when sending COBRA notifications?
- What kinds of benefits are COBRA eligible?
- How do individual state mandates play into the federal COBRA regulation?
There’s a lot to know, and it is critical to choose your COBRA administrator wisely. Finding an administrator that follows COBRA regulations and demonstrates fiscal responsibility will not only ensure your notices are mailed correctly and billing is up to date, but they can also give you valuable peace of mind.
Want to learn more about COBRA and how to have a successful COBRA plan? Join us on Thursday, May 24th at 11AM EST for a free webinar explaining the intricacies of COBRA and how to avoid potential pitfalls for employers. This webinar is also SHRM (1 PDC) and HRCI (1 HR PENDING) eligible.
For our broker partners, this course is also available in most states to be taught live for continuing education credit, so please contact us if you’re interested in bringing this class to your firm.
Sign up for the May 24th COBRA webinar today and protect your company from COBRA risk.