§ 6720C Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance

OLRC 119-134 · eCFR 2026-10-19

Enacted 2021 · Pub. L. 117-2 Amended · 0 Acts

2021(a) In general(b) Intentional failure(c) Reasonable cause exception
Prior provisions 1
  • A prior section 6720C, added Pub. L. 111–5, div. B, title III, § 3001(a)(13)(A), Feb. 17, 2009, 123 Stat. 464; amended Pub. L. 111–144, § 3(b)(5)(D), Mar. 2, 2010, 124 Stat. 45, related to penalty for failure to notify health plan of cessation of eligibility for COBRA premium assistance, prior to repeal by Pub. L. 115–141, div. U, title IV, § 401(d)(7)(B), Mar. 23, 2018, 132 Stat. 1212.

(a) In general Except in the case of a failure described in subsection (b) or (c), any person required to notify a group health plan under section 9501(a)(2)(B) of the American Rescue Plan Act of 2021 who fails to make such a notification at such time and in such manner as the Secretary of Labor may require shall pay a penalty of $250 for each such failure.

(b) Intentional failure In the case of any such failure that is fraudulent, such person shall pay a penalty equal to the greater of—

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    (1) $250, or

    (2) 110 percent of the premium assistance provided under section 9501(a)(1)(A) of the American Rescue Plan Act of 2021 after termination of eligibility under such section.

    (c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

    “if it is shown that such failure is due to reasonable cause and not to willful neglect.” Opening words

    “Reasonable” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)

    Textual readingALL OF= no penalty imposed
    “such failure is due to reasonable cause”

    “Reasonable” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)

    “not to willful neglect”
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