Recent Litigation Emphasizes the Importance of Using Correct COBRA Notices

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In Marrow v. E.R. Carpenter Co., Inc., a former employee filed a proposed class action lawsuit against her employer, claiming that the company’s group health plan failed to provide a proper COBRA election notice. The employee alleged that the notice was deficient in several ways, including: (1) not providing a specific deadline for electing coverage; (2) shortening the election period by giving her 60 days from her termination date rather than 60 days from the date of the notice; (3) providing inconsistent information about the premium amount and due date; (4) failing to identify the qualified beneficiaries entitled to elect COBRA; and (5) not being written clearly enough for the average plan participant to understand.  

While the employer sought to dismiss the case, a federal district court in the Middle District of Florida has now ruled that the case may continue. While the employer argued that the employee did not establish an injury that can be traced to the allegedly improper notice, the court concluded that the employee had done enough to establish her claims at this stage. The court also ruled that the “good faith” standard no longer applies to employer distribution of effective COBRA notices, emphasizing that the notice must meet specific legal standards established by the Department of Labor regulations.

Employers can always download the most recent model COBRA notices formulated by the U.S. Department of Labor at its website here:  https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra