Some of the Penalties for COBRA Non-Compliance:

• IRS Sanctions
  
  
• Non-deductible excise tax up to $100 per day per violation for each qualified COBRA beneficiary.
  
  
• ERISA Violations
  
  
• Notice violation penalties
  
  
• Up to $110 per day per violation
  
  
• Claimant Lawsuits
  

The biggest threat to employers is a lawsuit to pay for claims and other damages. Employers and plans may become the responsible party when COBRA regulations are not followed, thus assuming the liability for claims payment.