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.

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 you’re 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 QB’s 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 employer’s total expenditures on the group
health plan.

29. Audit Tips

30. • Take it seriously.
• Don’t 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. Don’t 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
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