Q.- Can we be subject to a financial penalty if we don’t send a COBRA Initial Rights Notice to a newly hired employee?
A.- The COBRA rules do not specify any financial penalty for failing to provide, or providing a late, Initial Rights Notice. However, a court could award penalties of up to $110 per day if a participant brings a lawsuit.
The Initial Rights Notice technically does not have to be sent upon hire. It must be provided to each covered employee (and his/her spouse, if any) at the time of commencement of coverage under the plan. The Department of Labor interprets this to mean the notice has to be provided no later than 90 days after coverage under the plan begins. Many employers send the Initial Notice at date of hire to easily track distribution of the notice.