Q. What kinds of penalties or liability does an employer face if it fails to provide notice of COBRA coverage upon termination of an employee?
A. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers who lose their health benefits the right to choose to continue group health benefits. An employer is subject to COBRA coverage if it sponsors a group health plan and employed more than 20 people on a typical business day in the year prior to the employee’s qualifying event (e.g., termination).
A covered employer must provide the terminated employee and his or her dependents who are covered under the employer’s health plan an election notice within 14 days of the qualifying event.
Failure to provide the COBRA election notice within the 14-day period can result in a statutory penalty of up to $100 per day. That penalty can be imposed even if the employer only “technically” violated the requirement and the worker did not suffer any harm because of the delay.
If the employee does suffer harm as a result of the employer’s noncompliance, the employee can sue to recover damages for medical claims that would have been covered under the health plan, plus attorneys’ fees.
Thus, if the employee does not have health insurance coverage because of the employer’s failure to comply with COBRA’s requirements and the employee suffers from a catastrophic illness, the employer may be forced to pay a mountain of medical bills.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/8508/what-happens-if-we-fail-to-provide-cobra-notice-upon-termination "
- 3 federal tests: Are workers employees or independent contractors?
- Showing restraint: Ensuring worker safety with workplace protective orders
- HR certification: Worth it? If so, which one to pursue?
- Applicant suing for failure-to-hire? Make sure she really did apply for the job
- Asking worker to stay can counter constructive discharge