COBRA Overview

Cobra (Consolidated Omnibus Budget Reconciliation, Act) is a federal law to mandate the continuation of benefits for employees based on one or more of six qualifying events. It is reported by the IRS that over 95% of all employers are out of compliance and at risk for adverse financial consequences.

Consequences for failing to comply with Cobra law include a $100 a day fine payable to the IRS and under ERISA law a fine up to $110 a day fine payable to the Qualified Beneficiary.

Most group health plans are subject to Cobra, including if greater than 20 employees, other benefits include but are not limited to: FSA’s, HRA’s, Dental, Vision, Prescription Drug Plans and certain Employee Assistance Plans.

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