Just when you thought it was “safe to go back in the water,” a new flurry of class action claims based on asserted deficient COBRA notices is drawing the interest of class action plaintiff law firms.
More Companies Are Facing Claims of COBRA Notice Deficiencies
A recent claim filed by a former Marriott worker in Florida asserts that the company’s COBRA notice given to her was deficient since it was not provided in Spanish and “failed to adequately explain the procedures to elect healthcare coverage so that an average employee would understand it.” The U.S. District Court for the Middle District of Florida recently denied Marriott’s Motion to Dismiss the Complaint.
Typical of most class actions claims, the Plaintiffs may get a “free pack of razor blades” while their attorneys walk away with millions in attorneys’ fees. In addition to Marriott, recent claims making similar allegations have been filed against Wal-Mart Stores, Inc., Cushman & Wakefield, Inc. and several other major employers. Last year, SunTrust Banks agreed to pay $290,000 to settle a class action claim that its COBRA notices were deficient. American Bottling Co. and BB&T have also settled similar accusations for undisclosed amounts.
Provide Employees with DOL’s Sample COBRA Notice
The regulations issued by the Department of Labor under COBRA include a sample notice to employees of their rights under the Act. Using that notice is considered to be “good faith compliance with the election notice content requirements of COBRA.”
Do You Know What Can Make Your COBRA Notice Deficient?
In the Wal-Mart case filed in the Southern District of Florida, the plaintiffs claimed Wal-Mart’s COBRA notice was deficient based on the following:
- Wal-Mart failed to use the model notice in its entirety;
- Wal-Mart made certain modifications which made the notice confusing and ambiguous;
- Wal-Mart failed to provide the name, address and telephone number of the person responsible for administration of continuation coverage benefits;
- Wal-Mart failed to explain that a spouse of a covered employee may elect continuation coverage on behalf of all other qualified beneficiaries;
- Wal-Mart failed to explain that a legal guardian may elect continuation coverage on behalf of a minor child; and
- Wal-Mart failed to explain that a beneficiary’s decision whether or not to elect continuation coverage “will affect the future rights of qualified beneficiaries to portability of group health coverage, guarantee access to individual health coverage, and other rights under the Act.”
Take Action Now to Avoid COBRA Notice Deficiencies!
If you have not recently reviewed the content of your COBRA notice, now would be a good time to do so. Employers who know of employees who struggle with fluency in English should consider providing the COBRA notice in the applicable employee’s native language or making other arrangements to guide the employee’s decision-making related to electing of continuation coverage. Do not hesitate to contact me or any member of our Labor & Employment practice group for guidance on COBRA notices or any other HR related issue.