The civil liability penalty is available to whom?

• A. Individuals who suffered losses due to not receiving coverage
• B. Employers
• C. The government
• D. Insurance companies

Answer: (A)

The civil liability penalty is a remedy aimed at the person who actually suffered harm. If a plan administrator or employer fails to provide COBRA continuation coverage or to give the required notices, the affected individual—someone who lost coverage or incurred losses because of that failure—can seek civil penalties as a remedy. This makes the penalty a way to compensate the harmed employee or qualified beneficiary, ensuring there is a financial incentive for employers and plans to comply. The government or the insurance company aren’t the direct beneficiaries of this civil penalty; the action is designed to protect and compensate the person who lost coverage. That’s why the correct answer points to individuals who suffered losses due to not receiving coverage.