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Published on Feb 10
While sending Consolidated Omnibus Budget Reconciliation Act (COBRA) election notices to qualified beneficiaries may seem pretty straightforward, it is important to make sure that the information is clear and can be easily understood by the recipient. Otherwise, your company may find themselves in the middle of a lawsuit, such as the one faced by Cushman & Wakefield, Inc.
Cushman & Wakefield terminated an employee and provided him with a COBRA election notice, as they were required to do. The employee, Luis, filed a class-action lawsuit because the election notice was unclear on when exactly the coverage would end and where to send the premium payments.
Cushman & Wakefield’s election notice did not include a specific date for the end of coverage. Luis was unsure whether he would lose coverage at the beginning or the end of the 18th month, of if the end date was exactly 18 months after he received the notice. It also did not provide an address to which he needed to send his payments. Instead, the notice merely stated that more information about payment would be provided upon completion of the election form.
Due to these notice failures, C&W paid a settlement of $390,000. In addition, C&W will ensure that its notices include the specific date when the period of continuation of coverage will end and an address for payment of premiums. In a similar case from 2016, SunTrust Banks Inc. agreed to pay $290,000 to settle class action claims that it provided insufficient COBRA notices to its terminated employees. In 2017, the American Bottling Co. and BB&T Co. also settled similar complaints for undisclosed amounts.
Sheakley can help your company with every aspect of COBRA Administration, including sending and managing all of the paperwork. We ensure that each notice sent contains all pertinent information as required by current federal regulations. Our COBRA team members are experts and can manage these tasks so you won’t ever have to worry about keeping up. Learn more about our COBRA administration here.