The 1986 Consolidated Omnibus Budget Reconciliation Act (“COBRA”) requires certain employers’ group health insurance plans to offer qualified beneficiaries (including employees, former employees, and certain dependents) the opportunity to continue health insurance despite events (such as termination) that would otherwise result in the loss of coverage. Information on employers’ and employees’ rights and obligations under COBRA can be found here: http://goo.gl/m83Qe. Compliance with COBRA is not difficult (even if not straightforward), and most employers are familiar with its day-to-day requirements.
Employers, however, may be less acquainted with COBRA’s recordkeeping mandates and what questions they may face if they’re unfortunate enough to be subjected to a COBRA compliance audit by the Internal Revenue Service.
The IRS – always anxious to help – last month released new procedures for it agents assigned to auditing COBRA compliance (publically available at http://goo.gl/6sIQS). The new “Audit Techniques” can be used by enterprising employers to self-check their compliance and prepare for when the Feds come knocking.
Less ambitious HR and Benefits Coordinators, though, may just want the highlights, in which case consider that the IRS during an audit may request:
How much fun is that, really?