What is the noncompliance period?

• A. A period of time used to calculate the excise tax an employer has to pay for failing to comply with COBRA
• B. A grace period for premium payment
• C. A time limit to elect COBRA
• D. A notification window for plan changes

Answer: (A)

Noncompliance period is the span of time when a plan sponsor has failed to meet COBRA requirements, and it’s the period used to calculate the excise tax for that failure. It starts after the deadline to comply with a COBRA obligation (for example, the deadline to send the required notice or to offer COBRA coverage) and ends when the failure is corrected (the notice is provided or the COBRA offer is made and the plan has the required information). The longer this period lasts, the greater the potential excise tax. This concept is about penalties for not following COBRA rules, not about premium payment grace, the election window, or plan-change notifications.