Q.- We realized that we never sent a COBRA qualifying event notice to an employee who terminated employment and was covered by our health plan. I'm pretty sure the individual now has another job and probably has health coverage. What are the penalties if we never send him a COBRA notice?
A.- Failure to comply with COBRA, even if you believe the individual in question now has other coverage, can lead to financial penalties. The actual damages that may be awarded depend on the exact facts and circumstances, but penalties can include:
- An excise tax by the IRS of up to $200 per day for each day that the plan does not comply with COBRA;
- A penalty of $110 per day for each day the plan fails to send a required COBRA notice;
- A potential lawsuit by the individual to get health coverage; and
- Possible fees for defending a lawsuit, including attorney's fees.
