Growing up my parents used a common sense approach regarding snakes. They taught us recognition and respect. Growing up we saw four kinds of snakes fairly regularly. The garter snake, bull snake, water snake and rattle snake. I learned the hard way that not respecting snakes comes with a price.

Today the scariest snake I deal with is COBRA. The COBRA in business isn’t really a snake, but an acronym. An acronym for the legislation that provides employees and their rights to continue employer sponsored benefits when they no longer work for the employer. It always surprises me the number of employers that are playing with this dangerous snake without recognizing the risk.

The key to COBRA is recognition and respect. Recognizing when COBRA applies and what benefits it covers. Respecting how complex the guidelines are and the substantial costs that can be incurred if the guidelines are not followed.

Employers need to answer three primary questions to determine proper recognition and respect for COBRA:
1. Does COBRA apply to us?
2. What does COBRA require us to do?
3. Do we administer COBRA internally or outsource it?

Not knowing the answers to the above questions is like playing with snakes. You may never get bit. But, if you do the consequences range from painful to fatal. See “Who wants to buy a heart?”

• Want to buy a heart?
• HSAs - Questions v. Answers
• How Much Does Free Cost?
• Dealing with the IRS
• The Save $8 to Spend $10 Coupon