At some companies, there may not be a well established system in place for handling the tasks necessary to comply with COBRA. Here’s a brief overview of COBRA as well as a question from a concerned employer about the implications of not complying, along with a detailed answer.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives eligible workers and their families who lose their health benefits the right to choose to continue group health benefits for limited periods of time under certain circumstances. The life events that enable an individual to become eligible for COBRA include voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death and divorce. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan. — The U.S. Department of Labor
Question: Our company sponsors a group health plan for its employees. What are the consequences if we fail to comply with COBRA?