TPA Failed to Send Notices

[Guest wekiva]

We export a COBRA file to our TPA via ftp every two weeks. This week, we received a phone call from a former employee asking when she would receive her COBRA information. We verified that she was on the export file, then contacted the TPA and asked when her paperwork would be mailed. We were told by our TPA that they had not received any files from us since October! :angry:

I sent the TPA a screenshot of the ftp site showing the dates/times all of the files had been uploaded. They then admitted they had made a mistake, sent notices to all QBs that day, and are refunding our service fees for November and December.

I know that we have 44 days from loss of coverage to notify QBs. We are okay with the November and December terms because they all fall within the 44 day limit; however, there were approximately 40 in the October exports that are outside the 44 day limit.

I know that, as the employer, we are ultimately responsible for the actions (or non-actions in this case) of the TPA. What penalties do we face for this error made by our TPA?

Thank you.

[Chaz]

1-Talk to your attorney.

2-Hope there is sufficient indemnification language in the services agreement with TPA.

3-Up to $100 per day per QB ($200 max for family) excise tax for each day not in compliance.

4-Up to $110 per day per QB ERISA penalty (no max per family) for each day not in compliance.

5-Possible liability for suits for incurred medical expenses.