COBRA Overview

What is COBRA?

In 1985, congress established the consolidated omnibus budget reconciliation act, better known as COBRA. The act was designed to protect individuals and families from losing the opportunity to maintain group health coverage in the event of a qualifying change of employment. In turn, this act places a great amount of liability upon employers to properly notify eligible participants and to maintain enforced policies with insurance carriers.


Is your organization in compliance with COBRA requirements?

Proper administration of COBRA can be a daunting and confusing task for employers to contend with internally. But the amount of time and frustration associated with properly administering COBRA is the least of your worries as an employer. Penalties for violating federal COBRA guidelines are stiff, and the cost of paying unnecessary health premiums can be substantial.

Penalties associated with violating federal COBRA requirements are simple; $110.00 per day, per violation. To provide an example, imagine a company commits just one violation, but does not recognize the fault for three years; the relating fine would total $120,450.00!

In addition, upon the termination of employment the question of whether or not to pay the terminated employees upcoming health premium often arises. The easy and unfortunately most common, answer to this question is to pay the premium in hopes of avoiding a potential lapse in coverage and a costly COBRA violation. In many cases these premiums are not the employer’s responsibility, but they are often paid regardless, costing the organization thousands of dollars each year.

TAG simplifies COBRA for you, providing 100% compliance and detailed reporting for all COBRA events. Please contact a TAG COBRA specialist to find answers for your COBRA related questions.