COBRA

There are hundreds of components that make up proper COBRA compliance.

Are you assured that ALL of these components are handled properly?

IRS field auditors have been given a 75 page instruction manual on how to audit your company for COBRA violations.

Will your program pass these audits with flying colors? Or will you Fail?

You are dealing with former employees… and, in many cases, former employees are not happy.

Underwood Vs. Fluor Daniel, Inc. 1997 US. App. Lexis 1410 (4th Cir’97)
The first reported case where a full $100 per day penalty ($36,500) was imposed upon a plan administrator for failing to provide an election notice to the employee’s spouse—even though she elected COBRA coverage and, therefore, was not negatively affected.

Smith Vs. Rogers Galvanizing Co. 1998 US app. Lexis 16482 (10th Cir’98)
The employer was obligated to pay $40,000 for unpaid medical claims plus $44,000 in attorney’s fees for giving the employee verbal notification of COBRA rights rather than written notice as required under COBRA provisions. Are You COBRA PENALTIES AND LIABILITIES

Could these fines be levied against YOUR company?

Public Health Service Act Violations

• State and local governmental action for “appropriate equitable relief.”

ERISA Violations

• Notice Penalties $110 per day per violation
• Other Judgments, Costs or Damages
• Audit and/or Enforcement Action by DOL

Internal Revenue Code Sanctions

• Excise Tax of up to $100 per day per violation for each Qualified Beneficiary during the non-compliance period.
• Complex minimum and maximum limitations apply.

Private Lawsuits

• Employers may be liable for payment of health care claims and fines.

We offer you a 100 point analysis to help ensure that YOU are in COBRA compliance.

When a COBRA payment is short, did you realize that you must accept it if it is not a significant shortage and give the beneficiary an additional 30 days to pay?

What do you do when an employee waives coverage for other dependents who are qualified beneficiaries?

When a notice is returned from the post office, do you attempt delivery again at least 5 additional times?

How do you handle formal initial notification when some of the dependents live outside the household?

What do you do for the other dependents when the employee qualifies for the additional 11 months of coverage due to a disability?

When does COBRA eligibility begin when an Employee is eligible for FMLA?

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Call your Spetner Associates, Inc. Specialist to help YOU be COBRA Compliant
314-442-0007
Fax 314-997-5054
8630 Delmar Blvd., Suite 100
St. Louis, MO 63124

Spetner Associates, Inc.