Tips to Survive a COBRA Audit

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There's nothing more scarey than the fear that presents itself when a COBRA administrator hears the words, "COBRA audit". Review these survival tips to make it through a requested COBRA audit.

Transcript of Tips to Survive a COBRA Audit

  • 1.Tips to Survive a COBRA Audit

2. Nothing can compare to the fear a COBRA administrator feels when they hear the words, COBRA audit. 3. No one wants to experience a COBRA audit, but as a result of revised IRS audit guidelines, audits have increased significantly, along with the possibility of penalties. 4. The IRS guide: Audit Techniques and Tax Law to Examine COBRA Cases (Continuation of Employee Health Care Coverage) 5. Provides standards for IRS investigators to use for COBRA audits to ensure that employers are in compliance. 6. Follow these tips to make sure youre prepared to pass your COBRA audit. 7. Gather Information: be prepared to have the following COBRA-related items for review: 8. A copy of any contracts with third-party administrators that handle COBRA administration and service providers that provide benefits subject to COBRA 9. Methods used to notify the plan administrator of a qualifying event 10. Methods the plan administrator uses to notify qualified beneficiaries of COBRA rights 11. A copy of all COBRA notices mailed 12. A copy of any letters mailed to QBs 13. A copy of any invoices mailed for COBRA coverage 14. A copy of group health plan documents and summary plan descriptions 15. Any information on past or pending lawsuits for COBRA obligations 16. Documentation of notices that were mailed, including proof of mailing 17. Documentation of all COBRA dates, such as employment termination and COBRA termination of coverage 18. Documentation of COBRA procedural updates 19. Health plan enrollment package, including notices and disclosures provided to employees at the time of enrollment (for example, the COBRA general notice) 20. Information on any wellness programs offered by the plan that might be subject to COBRA 21. Each QBs information on what they elected, how long they were on COBRA 22. Documentation of premium amounts collected from each QB and for each plan, including any health care tax credit payments 23. Method for processing insignificant premium underpayments 24. Documentation of COBRA-related disclosures to health care providers 25. A list of individuals with qualifying events during the year 26. A written COBRA procedures manual with instructions 27. Documentation of COBRA training for those with COBRA responsibilities 28. This could be, for any one taxable year, up to $500,000 or 10 percent of the employers total expenditures on the group health plan. 29. Audit Tips 30. Take it seriously. Dont ignore or procrastinate. Gather all information immediately. 31. Contact the auditor to establish cooperation and glean reasons, other pertinent information. Consult with legal counsel as needed. Do not provide more information than what the audit letter requests. 32. Dont Be Scared, Be Prepared 33. Before the IRS knocks on your door, make sure you have a proper compliance program. 34. Join over 29,000 of your peers and receive our Newsroom blog. Visit us at 800.300.3838