COBRA Notice Penalties: Up to $110 a Day, Plus Medical Bills

Published October 5, 2026

"$110 a day" is the number people quote about missed COBRA notices. It is real, but it is a ceiling a court may use, not a fine that applies by itself. Medical bills are in the same category: some courts have treated them as possible relief, and others have not awarded them. Separately, the tax code has its own excise tax. Here is what each source says.

The statute: up to $100 a day, in the court's discretion

ERISA section 502(c)(1) says an administrator who fails to meet certain notice requirements "may in the court's discretion be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper." (Source: 29 U.S.C. 1132, ERISA civil enforcement (section 502), (c)(1).) A participant or beneficiary can bring a civil action for that relief. (Source: 29 U.S.C. 1132, ERISA civil enforcement (section 502), (a)(1)(A).)

Three words in that sentence matter. May: the court decides whether to award anything. Up to: the court decides how much. Personally: the liability runs to the administrator, owed to each participant or beneficiary affected.

Where $110 comes from

The Department of Labor raised the maximum from $100 a day to $110 a day by regulation, for violations occurring after July 29, 1997. (Source: 29 CFR 2575.502c-1, adjusted civil penalty under ERISA section 502(c)(1).) The current text of that regulation still reads $110. (Source: 29 CFR 2575.502c-1, adjusted civil penalty under ERISA section 502(c)(1).) So $110 is the maximum per day, not a fixed rate.

Which COBRA notices it covers

The penalty provision names failures under paragraphs (1) and (4) of the COBRA notice section, 29 U.S.C. 1166(a). (Source: 29 U.S.C. 1132, ERISA civil enforcement (section 502), (c)(1)(A).) Paragraph (1) is the general notice the plan gives each covered employee and spouse when coverage begins. Paragraph (4) is the administrator's notice to qualified beneficiaries of their rights after a qualifying event. (Source: 29 U.S.C. 1166, COBRA notice requirements, (a)(1) and (a)(4).) The employer's own 30-day notice of the event to the administrator is paragraph (2). (Source: 29 U.S.C. 1166, COBRA notice requirements, (a)(2).)

What courts have actually done

None of these cases sets a rate. They show how much the outcome depends on the facts.

• Morehouse v. Steak N Shake (6th Cir. 2019). The district court awarded $50 a day, $2,549.20 in dental bills and attorney's fees. The appeals court reversed all of it, because it found there had been no qualifying event that required a notice. (Source: Morehouse v. Steak N Shake, Inc., No. 18-4186 (6th Cir. September 13, 2019).)
• Randolph v. East Baton Rouge Parish School System (5th Cir. 2021). The court said courts have discretion to impose a penalty of $110 per day, and sent the penalty question back to the district court. It left in place the denial of medical expenses, noting that where the premiums the plaintiff would have owed exceed the medical costs, district courts have found no damages are owed. (Source: Randolph v. East Baton Rouge Parish School System, No. 21-30022 (5th Cir. November 30, 2021).)
• Howard v. Ivy Creek of Tallapoosa (M.D. Ala.). The court said equitable relief can include an order to pay the medical bills, or reimburse bills the plaintiff paid, and that delegating the mailing to a third party did not absolve the employer when it failed to provide the correct last known address. It did not set an amount at that stage. (Source: Howard v. Ivy Creek of Tallapoosa, No. 3:20-cv-213 (M.D. Ala.), memorandum opinion.)

So "plus medical bills" is possible relief, not a line item. Whether bills are awarded, and whether premiums the person would have paid are offset against them, is up to the court.

The other exposure: the excise tax

The tax code imposes a tax on a group health plan's failure to meet the continuation coverage requirements, and those requirements include the notice requirements. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (a) and (f)(6).) For a plan other than a multiemployer plan, the employer is liable. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (e)(1)(A).) The key terms:

• $100 a day per qualified beneficiary during the noncompliance period, (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (b)(1).) capped at $200 a day for all beneficiaries tied to the same qualifying event. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (c)(3).)
• No tax for any period where no responsible person knew, or with reasonable diligence would have known, of the failure. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (c)(1).)
• No tax if the failure was due to reasonable cause and not willful neglect, and is corrected within 30 days of when it was or should have been known. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (c)(2).)
• A minimum of the lesser of $2,500 or the computed tax per beneficiary when failures are not corrected before a notice of examination is sent, or $15,000 where violations are more than de minimis. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (b)(3).)
• An annual cap for failures due to reasonable cause and not willful neglect: for a single employer plan, the lesser of 10 percent of what the employer paid for group health plans in the preceding year, or $500,000. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (c)(4)(A).)
• Exceptions for governmental plans, church plans, and qualifying events in a year that follows a calendar year in which all employers maintaining the plan normally employed fewer than 20 employees. (Source: 26 U.S.C. 4980B, failure to satisfy continuation coverage requirements, (d).)

What to take from this

Neither figure is automatic. The $110 is a maximum a court may award, and the excise tax has defenses and caps built in. What is certain is that each depends on whether a correct notice went out on time, which is the part you control. For what the notice must say and when, see the 14-item checklist and the deadline map.