COBRA is a component of the massive Consolidated Omnibus Budget Reconciliation Act of 1985 that was signed into law by President Reagan on April 7, 1986. This law provides continuation coverage requirements that are applicable to group health plans and the individuals that lose coverage under such plans.
Under COBRA rules, both group health plans and the individuals losing coverage under those plans have specific guidelines and strict timetables to follow in both offering and electing to receive COBRA coverage.
COBRA is legislation that is primarily directed toward employers and involves more than just taking care of those people "on COBRA"; it is the total process of notifying, tracking, and documenting all facets of compliance with this highly complex law. As such, employers, and not their insurers or third party administrators, are primarily liable for COBRA compliance. If sued or audited by regulators, an employer must be able to prove that it has properly complied with COBRA rules, or else be subject to substantial penalties as well claims payments for the aggrieved individual(s). Specifically, plans that violate COBRA's provisions may be subject to a non-deductible excise tax penalty equal to $100 per day, per affected individual, per violation, as well as ERISA notice penalties of up to $110 per day from the date of each compliance failure.
The goal of COBRA Direct is to save client companies TIME and MONEY. You operate your business in a fast-paced and competitive market. You do not need to be bogged down by the administrative burden that COBRA compliance presents. Outsourcing your COBRA administration to COBRA Direct allows your key people to focus on strategic initiatives that are central to the success of your business.
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