When employees, spouses, and / or their children lose their health insurance coverage due to a qualifying life event, they are entitled to continued health insurance under the Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA. Companies with 20 or more employees for at least 50% of their business days are required to offer COBRA.
Life events that qualify an individual and their families for COBRA health insurance include: resignation, reduction of hours, termination for reasons other than gross misconduct, divorce, loss of dependent status, death of an employee, and an employee qualifying for medicare.
In most cases, COBRA coverage lasts for 18 months after the qualifying life event, or until the policyholder qualifies for a new health insurance plan. When an individual receives COBRA due to the loss of dependent status, divorce, death of the primary policy holder, or the primary policy holder qualifying for medicare, then coverage may extend until 36 months after the life event.
Individuals who experience a COBRA-qualifying life event but are denied COBRA insurance, never receive COBRA eligibility information or receive a deficient COBRA notice may be able to file a lawsuit.
Companies are legally required to provide two COBRA notices: the COBRA general notice and the COBRA election notice.
The COBRA general notice explains what COBRA is and how individuals qualify for it. It’s often provided along with the Summary Plan description that covers the group health care plan benefits. Companies have 90 days after an employee, spouse, or dependent becomes eligible for the company’s group plan to send the general notice.
The COBRA election notice is sent to employees, spouses, and their dependents when they lose health care coverage. This explains how long coverage lasts and how much monthly premiums are. Companies have 14 days to send the notice out if they use an outside administrator, and 44 days if they do not.
A number of large employers were hit by a wave of class action lawsuits between 2016 and 2019 involving claims related to deficient COBRA notices.
Three class action complaints alleging claims due to deficient COBRA notice were filed in 2019 including a lawsuit against Target Corporation. In the Target case, the plaintiffs are alleging that they were unable to make an informed decision about their rights under COBRA due to the “piecemeal” fashion by which the notice was provided. Target had allegedly provided information about the plaintiffs’ COBRA election rights in multiple documents and also allegedly failed to include an actual election form. Of particular interest is the critique of Target’s utilization of a general information telephone number to assist with any COBRA questions without distinguishing between the COBRA Administrator and the Plan Administrator.
In a different class action case filed this year that subsequently settled, a COBRA qualified beneficiary alleged that the COBRA notice received failed to identify a termination date for the health care coverage, the name of the plan administrator, and where COBRA premiums should be mailed.
Did you receive a flawed or confusing COBRA notice from your employer? If you received a deficient COBRA notice from your employer, contact Shamis & Gentile, P.A. today and submit your information here to join a COBRA notice class action lawsuit investigation.