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COBRA Regulations
COBRA Basics
What is the Basic Purpose of Cobra?
To allow an individual who might otherwise lose coverage under a group health plan the ability to continue coverage for a limited and specified time. The coverage offered must be the same coverage the individual(s) enjoyed the day before the qualifying event. And the coverage must be offered even if it is no longer of value to the individual(s).
Who Must Comply With Cobra?
Almost all group health plans of private and public employers
• State & local governments
• Corporations, Partnerships
• Tax-exempt organizations
• Many plans that are exempt from Federal COBRA must comply with state continuation laws (mini-COBRA) or federal continuation laws
Consequences for Non-Compliance
• $100 per QB per Day, $200 per Family maximum
• Date compliance failure began to Date corrected
–If earlier, six months after the last day of the applicable COBRA maximum coverage period.
Worst Case Scenario: $200/family x 24 months (18 + 6) = $146,000 in fines*
*Does not address possible penalties imposed by federal court for ERISA violations.
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