COVID-19 (Coronavirus) Updates: CobraHelp will continue to deliver service excellence and compliance support to our Clients and their Employees during these challenging times. We are working to provide Employers and Agents with the latest legislative updates on a national level. We encourage Employers, Benefits Administration partners and Insurance Agents to learn more about the most recent COVID-19 DISASTER RELIEF updates (the American Rescue Plan Act) here. 
CobraHelp
  • Home
  • About
    • Testimonials
  • Services
    • COBRA Administration
    • State Continuation Administration
    • Retiree & Direct Billing
  • Resources
    • How COBRA Works
    • How Brokers Benefit with CobraHelp
    • Employer FAQ
    • Broker FAQ/Help
    • Blog
    • HR Tools
  • Contact
800.398.2946​
LOGIN Request a Proposal​
  • Home
  • About
    • Testimonials
  • Services
    • COBRA Administration
    • State Continuation Administration
    • Retiree & Direct Billing
  • Resources
    • How COBRA Works
    • How Brokers Benefit with CobraHelp
    • Employer FAQ
    • Broker FAQ/Help
    • Blog
    • HR Tools
  • Contact

CobraHelp Blog

BENEFITS | HR | COMPLIANCE
READ: 5 Common COBRA Mistakes & How to Avoid Them
​Read our blogs for the latest in COBRA news and updates

Subscribe to The COBRA Advisor newsletter for fresh HR insights, law updates, and more.

Subscribe

The True Cost of Non-Compliance

10/6/2016

0 Comments

 

Author

Grant Ameel

Picture

Statistics show more employers are finding out the hard way....

If you’re reading this, you are most likely aware that offering continuation coverage under COBRA isn’t a voluntary benefit that employers can either chose to participate in or not. The requirement is a federally mandated law applicable to all employers who employed 20 or more employees for at least 50% of the previous year.

With that being said, as with most laws, there can be severe consequences for failure to abide by the guidelines set forth by Consolidated Omnibus Budget Reconciliation Act. The most notable and common non-compliance infraction is the failure to provide the COBRA Notice in a timely fashion. An employer or Plan Administrator could be fined an Internal Revenue Code excise taxes penalty of $100 per day, per failed notice ($200/day if the failure affects more than one qualified beneficiary for the same qualifying event). On top of that they could also face ERISA (Employee Retirement Income Security Act) statutory penalties of up to $110 per day. Needless to say, those fines can accumulate into a large sum rather quickly, especially if there’s multiple notices that haven’t been sent out in time. Many employers and insurance agents are well aware of these potential damages, yet non-compliance issues were on the rise in 2015 according to the experts. 
Yet, as damaging as those fines can be, they can appear trivial in comparison to a class action lawsuit.
In the past courts have been tentative to endorse COBRA class action lawsuits on the basis that proving a COBRA violation was thought to involve explicit, fact-specific issues that ought to be regulated by the Department of Labor and the IRS (the two departments responsible for interpreting and enforcing the provisions of COBRA). However in recent years the courts have been more willing to hear cases stemming from an array of complex COBRA compliance issues.

For a list of just some of the noteworthy COBRA class action lawsuits that have been filed in federal courts, click here. As that article points out, the average cost to defend a COBRA dispute is $50,000, so even if you win, untimely you still lose. Another important take away from that article is it does a great job at highlighting the various ways a company or Plan Administrator could be liable for non-compliance. Whereas most employers tend to only worry about the content and dispersion of the COBRA Notice itself, the reality is COBRA is one of the most intricate and perplexing labor laws in this country and it’s important that companies insure they aren’t liable for any of the copious potential COBRA violations. 

Yet as damaging as those fines may be, they are often trivial in comparison to common class action lawsuits....

Picture
If you have any concerns that your current COBRA administration procedures might not be up to standard, we strongly encourage you to contact us at CobraHelp to see what we can do to help you prevent the formerly mentioned, costly outcomes. We also have a COBRA compliance checklist to help you get started. Here at CobraHelp, not only do we have the best rates and customer service in our industry, but we pride ourselves on being the COBRA gurus that offer simple, affordable ways to potentially save you thousands to millions of dollars in fees and litigation. (Trust us, we’ve been doing this for over 30 years, it’s kind of our thing.)
Subscribe.

RSS Feed

Keywords: compliance, erisa, ebsa, cobra coverage, cobra rules, irs penalties, aca penalties, cobra penalties, hr compliance, help with cobra, cobra law suits, cobra procedures
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Categories

    All
    2016 Cobra Reporting Deadlines
    ACA Benefits
    ACA Compliance
    Affordable Care Act
    Benefit Admin Solutions
    Cobra Administration
    Cobra Administration Companies
    Cobra Benefits
    Cobra Compliance
    Cobra Compliance 2016
    Cobra Compliance Audit
    Cobra Customer Service
    Cobra Eligibility
    Cobra Employer Requirements
    Cobra For Retirees
    Cobra Guidelines For Employers
    Cobra Non Compliance Penalties
    Cobra Retiree Coverage
    Cobra Rights
    Cobra Services
    Compliance Outsourcing
    Federal COBRA Regulations
    Health Savings Account
    Medicare Compliance Regulations
    Medicare Modernization Act
    Open Enrollment 2017

    HR Outsourcing Services Blog RSS Feed

    Archives

    January 2025
    November 2024
    October 2024
    August 2024
    May 2024
    April 2024
    March 2024
    November 2023
    October 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    September 2022
    May 2021
    April 2021
    March 2021
    February 2021
    November 2020
    September 2020
    August 2020
    July 2020
    May 2020
    April 2020
    March 2020
    February 2020
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    March 2018
    January 2018
    October 2017
    August 2017
    July 2017
    April 2017
    February 2017
    November 2016
    October 2016
    September 2016
    September 2015
    February 2015
    January 2015
    April 2014
    March 2014
    February 2014

CONTACT

CobraHelp
Send Mail To: 
1551 Emancipation Hwy, Unit #1050
Fredericksburg, VA 22401
Toll Free: (800) 398-2946 
Local: (303) 322-2043
Email: ​[email protected] ​
​© Copyright 1986-2025 CobraHelp.  All Rights Reserved
HTML Sitemap | XML Sitemap 
Terms & Conditions | Privacy

RESOURCES

​US Department of Labor
Electronic Code of Federal Regulations
Quick Checklist
​For Insurance Agents
​
Career Opportunities
​Participant Login
Email: ​[email protected]

​RESOURCES

HR Compliance Tools
FAQ/HELP Brokers
FAQ/HELP Employers
Request Demo
Request Media Kit
​How COBRA Works
SHRM Listing White Papers

​RESOURCES

Connect with us!