What is the main purpose of the penalties described for COBRA violations?

• A. To penalize unlawful noncompliance with COBRA provisions
• B. To reward compliance with tax credits
• C. To regulate employee wages
• D. To govern health plan design

Answer: (A)

Penalties exist to enforce COBRA requirements, acting as a strong deterrent against noncompliance. They ensure plan sponsors and administrators follow the rules for offering continuation coverage and providing timely, clear notices to qualified beneficiaries. By imposing penalties for unlawful noncompliance, the law protects employees’ right to elect and maintain continuation coverage after a qualifying event and helps keep the COBRA program functioning properly. The other options don’t fit because COBRA penalties aren’t about tax credits, wage regulation, or plan design; they focus on ensuring proper compliance with COBRA duties.