COBRA Compliance

Avoid significant fines and penalties assessed by the Department of Labor and the IRS for COBRA violations. Failure to perform this function correctly can subject your company to thousands of dollars in direct payment of medical claims.

Corporate Synergies provides our clients — tailored to their needs — a series of expert services that reduce their compliance and administrative burden. Our standard COBRA compliance package includes:

• An onsite audit of your COBRA processes and procedures, and subsequent remedies of gaps
• Drafting and delivery of the required COBRA Administration Manual
• Assistance in development of all necessary COBRA materials (notices, state specific rules, etc.)
• Certificate of Compliance issued upon satisfactorily completing audit
• Ongoing COBRA Support including billing, eligibility, payment processing and call center support

The current IRS COBRA sanctions are very serious:

• The excise tax penalty is $100 per day for each day of noncompliance, but if there is more than one qualified beneficiary with respect to the same violation, the maximum amount of tax for any day is $200 per family.
• Penalties may be as high as $2500 for each beneficiary affected by the failure to comply, or the total amount based on the length of the noncompliance period, whichever is less.
• If the IRS finds a violation that it considers to be more than just minimal, employers may be subject to a penalty of as much as $15,000.
• The maximum any employer could be taxed in a given year is $500,000 or ten percent of the health plan costs in the previous year, whichever is less.