Question of the Week

Q.- We forgot to provide a COBRA notice to a recently terminated employee. Is there a time limit for providing notice? What should we do and what are the rules on this?

A.- You should provide the individual a COBRA qualifying event letter and election form as soon as possible. There are no set rules for correction, but there are the following consequences of not complying with COBRA:

• Excise tax penalties may be assessed for each day's failure to comply;
• Statutory penalties of up to $110 per day may be recovered under ERISA;
• Qualified beneficiaries may sue to recover COBRA coverage;
• Other relief may be granted by a court.

You should consult with your legal counsel, but we suggest providing the COBRA election immediately.