What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This requires employers with 20+ employees to offer continuation coverage of group health plans to employees and their dependents losing coverage due to certain life changing events. The Federal Government and Church plans are excluded.

Compliance Liabilities & Penalties

• The COBRA law is enforced by several governmental entities, including the IRS, ERISA, and the DOL
• Failing to comply with COBRA can result in:
  • Lawsuits by qualified beneficiaries including damages and attorney fees
  • A non-deductible excise tax of $100 per day per qualified beneficiary, payable to the IRS
  • ERISA fines up to $110 per day per qualified beneficiary for each violation, payable to the individual
  • Medical claim payments made by the employer as if the individual had been allowed to elect COBRA

COBRA Services

American Benefit Services offers the following services for the administration of CORBA.

• A one-time mailing of Initial Notifications to all current active participants, if this has not been done
• Initial Notifications sent to all new employees as they become covered under the group health plan
• Notification to Qualified Beneficiary (s) of eligibility and COBRA rights, once a qualifying event has taken place
• Collection of monthly premiums
• Correspondence as necessary to participants regarding changes, termination of COBRA, etc.
• Notification to insurance carriers of elections and terminations as needed
• Monthly remit of premiums and reporting of all activity to the Employer