The penalties for not complying with the COBRA law are listed below:
- The IRS can charge you $100 tax per day of noncompliance per person or $200 tax per day per family.
- If the IRS has chosen to audit you and you have not corrected the violation, it is possible that you could have a $2,500 fine per beneficiary or the daily tax listed above. The lesser of the two penalties would generally be what is fined.
- If the violation is determined “more than trivial” by the IRS, the company could face up to a $15,000 fine.
- You cannot be charged a fine of more than $500,000 annually or 10% of the past year’s total health care costs.
- The employees along with the beneficiaries have the right to sue to cover the medical expenses that would have taken place when the COBRA should have been offered. During lawsuits regarding COBRA, the court is permitted to charge the employer the attorney fees if the employee’s party has won the case. If the violation is corrected within 30 days and proven unintentional, the penalties could be lessened.
Employer Responsibility For COBRA
COBRA, is a federal law requiring allowing workers and families the right keep their health insurance plan they through work, if that insurance would end. The federal law requires this of companies with 20 or more workers. The employer’s responsibility to COBRA includes sending notifications, managing the enrollment and receiving premium payments.
Affordable Temporary Health Insurance
If you are fairly healthy and still want to remain insured, alternatives to COBRA insurance may be available based on where you live. Short-term health insurance is a popular option and available in most states. This can protect you from high medical costs of new injuries or new illnesses that unexpectedly occur while allowing you to use any licensed doctor. Coverage is available up to $1 million per person. For more information and pricing, you can call us at 1-877-262-7241 or complete a free quote online.