Plan renewal season is when COBRA compliance is most likely to break down, with $100 per person per day excise tax exposure
Key points
- December and January, peak group health plan renewal months, are when COBRA administration is most likely to break down
- If premium, carrier or plan changes do not reach the COBRA administrator in time, beneficiaries may get notices with wrong rates
- Under IRC Section 4980B, an excise tax of $100 per affected qualified beneficiary per day applies while noncompliance continues
Insurance Business reports that December and January, peak renewal months for group health plans, are when COBRA administration is most likely to break down. If premium, carrier or plan changes do not reach the COBRA administrator in time, beneficiaries may get notices with wrong rates. Under IRC Section 4980B, an excise tax of $100 per affected qualified beneficiary per day applies while noncompliance continues. This is for reference only and does not constitute legal advice.
What employers should do
- Notify the COBRA administrator of premium, carrier or plan changes before renewal
- Check that rates in COBRA notices sent after renewal are correct
Original report: Insurance Business ↗Edited with AI assistance. Facts are based on official sources and original reports. For information only; not legal, immigration or insurance advice.