Employee Benefit Guidance & Compliance Solutions

Posts Tagged "COBRA Compliance"

Everything to know about COBRA Compliance

By on Oct 28, 2020 in COBRA | 0 comments

COBRA compliance is a complex process in which many businesses struggle. Many companies are intimidated by the intensive manuals and the strict timelines that come with COBRA compliance. The most effective tool while proceeding with COBRA compliance is knowledge and understanding of the process. In this post, we wanted to lay out the ground rules and basics for COBRA compliance. But, of course, you can streamline the process by contacting us for a COBRA administration consultation that would take care of everything for you! The Basics If you are an employer that holds over 20 employees, federal law requires, and some states as well, that you continue medical care coverage to employees that have separated from the company. There are however a number of things that must be considered to determine who is eligible and what they are to receive exactly. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which was enacted in 1985. According to the act, coverage must be continued for 18-36 months for those eligible and depending on the circumstances of the change in employment. Penalties involved The last thing that you want to see is an invoice charged by the IRS for $110 per day. The worst part is, that the fee is per each qualified beneficiary who did not receive coverage. COBRA penalties can be extensive, that’s why it’s imperative to stay in compliance! Keep in mind that potential penalties do not include the possibility of a lawsuit and legal representation. If the IRS also learns that non-compliance continued after their notice, the minimum tax levied is $2,500. That’s why it’s preferable to have experts guide you on the subject, such as the team here at PF Compass! Number of Employees When counting how many employees an organization employs, part-time employees must also be factored into the equation. Each part-time employee must be considered as a fraction of a full-time employee. You must also factor in the number of hours they work as well. This means that a mix of part-time and full-time employees could very well equate to you having to offer COBRA. Take precautions into noting that some states have COBRA similar laws that may enforce the same regulations for organizations...

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