/// Retirement, Flex & COBRA News
Jayne L. Gaffney
COBRA Penalties for Non-Compliance
The final regulations outline the statutory excise tax penalties imposed on plans for failure to comply with COBRA.
Specifically, plans that violate COBRA’s provisions may be subject to a non-deductible excise tax penalty equal to $100 per day, per an affected individual, per violation. In addition, ERISA provides notice penalties of up to $110 per day from the date of the compliance failure.
The cumulative nature of this penalty can add up to a sizeable sum very quickly, especially in cases where the employer repeats a violation or series of violations with respect to a large number of individuals.