Tag: continuation coverage

3rd Circuit Rejects Call to Change $3K COBRA Notice Penalty

In rejecting a qualified beneficiary’s attempt to increase a nearly $3,000 COBRA notice penalty, the 3rd U.S. Circuit Court of Appeals noted that the employer/plan administrator’s efforts to remedy the violation did not warrant any higher award. The court also rejected the individual’s request for the reimbursement of medical expenses and attorney’s fees. But in […]

COBRA Penalties Not Needed When QB Got ‘Free’ Coverage, 8th Circuit Affirms

An employer/plan administrator that tried to make good on a COBRA administrative error got more reinforcement that its efforts greatly minimized its legal liability. The 8th U.S. Circuit Court of Appeals affirmed the fact that the aggrieved qualified beneficiary received two years of free health coverage effectively cancelled out any need to impose penalties for […]

Court OKs $1.3M Settlement in COBRA/ARRA Class Action

Although it admitted no wrongdoing, an employer and plan administrator agreed to pay a $1.3 million settlement to a group of former employees who alleged they never received COBRA election or premium subsidy information after their involuntary termination of employment in 2010. In addition to COBRA and premium subsidy notice claims, they also sued the […]

Short-lived Sale Option Did Not Negate COBRA Small-employer Exception

A former employee argued that her former employer, which employed fewer than 20 employees (and thus was exempt from COBRA) for eight months of the year, formed an affiliated service group with another employer and thus employed more than 20 employees for four months of that year. Thus, she contended the employer became subject to […]

Loss of COBRA Eligibility Due to Union Lockout Deemed Labor Rights Violation

Typically, interference with an employee’s COBRA coverage rights raises legal claims under ERISA; however, employers should take heed that in some instances other federal laws are invoked. Recently, an employer was found to have violated federal labor law when it engaged in an unlawful lockout of union employees that included the cancellation of their health […]

COBRA Penalties and Legal Costs Due to Notice Failure, Evasive Answers Rise to $126K

An employer/plan administrator continues to get an expensive lesson on the risks of having both inadequate COBRA notice procedures and poor explanations of how those procedures work. An “inefficient, unwieldy” notice process — coupled with evasive and contradictory answers from employees on why a qualified beneficiary did not receive a COBRA election notice — led […]

Employer Can’t Pin COBRA Compliance on Insurer, Court Points Out

Under COBRA’s small-employer exception, employers with fewer than 20 employees do not have to offer COBRA coverage upon what would otherwise be “qualifying events.” This determination is made based on how many employees were employed, on average, during the prior calendar year. When purchasing group coverage, it is important for employers to be mindful of […]

Flawed COBRA/Leave Policy Still Leaves Employer With Unpaid Stop-loss Claims

An employer whose COBRA/leave policy did not align with a stop-loss policy’s terms continues to be on the hook for a COBRA qualified beneficiary’s medical claims that were rejected by the stop-loss insurer. The employer unsuccessfully appealed a lower court ruling that the claims were ineligible under the policy terms because they did not include […]

Learn Elements of ERISA Plan Status to Help Avoid State-law Claims

A former employee’s failed attempt to call COBRA coverage a “privately paid” policy, rather than an ERISA plan, in order to maintain state-law claims against a group health insurer offers a chance to remind employers about importance of knowing the legal status of their benefit plans. In the case, the individual sued the insurer for […]

Four Tips on Reviewing and Updating COBRA Notice Procedures

The failure to administer COBRA continuation coverage notices correctly can cost employers and plan administrators money, time and aggravation, says COBRA expert Paul M. Hamburger, Esq. of Proskauer Rose LLP. He provides four tips they can use to help avoid COBRA notice missteps: (1) prepare clear, accurate and complete COBRA notices; (2) be sure to […]