President Ronald Regan signed into law, passed by the U.S. Congress, a plan that would ensure most employees (and employees' dependents) be given the opportunity for continuing health care coverage after their employment ended with a company or organization within the private sector. This is known as COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985).Generally, a company consisting of 20 full-time employees or more must offer COBRA to a qualifying employee at the time of separation. Because laws and regulations can change on the state and federal levels, if your COBRA plan is not TAMRA (Technical and Miscellaneous Revenue Act of 1988) compliant, you can be setting yourself up for costly penalties which could realistically put a small-business owner out of business. The current requirements under TAMRA encompasses all facets of COBRA to include time frames, consistency in administration, notice language and notifications. Is your company or organization familiar with the requirements under TAMRA?
There are four requirements under TAMRA for COBRA compliance:1. Having written instructions for how to administer COBRA
2. Employment or outsourcing of individuals that are responsible for COBRA compliance who have proof of training
3. Has the plan been designed and updated according to professional advice?
4. Is your current plan monitored by a third party such as independent auditors?
Are you up to date on TAMRA compliance, penalties and fees? Do you employ personnel familiar with the four requirements to keep your company compliant or are you associated with an independent auditor such as a CPA or HR company? Presently, TAMRA penalties for one individual can run $100 per day per violation; $200 per day for two or more individuals.
When it comes to the most litigated area of employee benefits, look no further than the myriad of COBRA lawsuits, court costs, and attorneys' fees. Statistics state that the IRS ballparks approximately 90 percent of all employers currently have COBRA plans that are not TAMRA compliant regarding COBRA services. That's a huge percent.
How do you ensure your company or organization will not be subjected to an IRS audit? By choosing a local Human Resources company to outsource your COBRA plans. Interestingly, COBRA is the most commonly outsourced HR function.
Stellaris Group in Roswell, Georgia has a growing team of human resource professionals who can help you to make sure you are TAMARA compliant when it comes to your COBRA plans and services. They offer a full suite of HR services and are up to date with the latest laws regarding separation services and COBRA administration.