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COBRA law requires a Plan Administrator to provide notification to employees when they first become covered under the company's group health plan. The method by which employers provide these notices is the single biggest reason most companies are out of compliance. A notice must also be provided when a Qualifying Event occurs.
The Department of Labor estimates that approximately 90% of all employers are out of compliance. Non-compliance leaves you exposed to fines, excise taxes, and lawsuits. The IRS may impose an excise tax of up to $100 per day, per individual ($200 per day per family). ERISA penalties may apply in addition to excise taxes. The plan administrator may be personally liable to the participant or beneficiary for up to $110 per day.
In addition to COBRA administration, Certificates of Credible Coverage must be sent after termination of coverage to meet HIPAA requirements. Admin Strategies manages the COBRA/HIPAA process as part of our annual fee. Unlike our competitors, we don't nickel and dime our customers with separate per piece charges for each notification.
COBRA is the ultimate high risk, low reward task. If done perfectly, nothing happens. Forget to send one form and you open yourself up to potential litigation from ex-employees.
Our COBRA/HIPAA administration services also allow us to maintain an employees entire eligibility life cycle under one roof. This assures a seamless transition of employee status changes and eliminates delays that are common with multiple vendors.
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