COBRA: What You Should Know About Notices and Deadlines

The coronavirus pandemic has altered daily life for everyone across the globe, and caused tens of millions of job losses in the United States. Because losing your job often means losing your health insurance, this can be a double whammy for affected individuals.

Congress recognized this problem in 1985 by passing the Consolidated Omnibus Budget Reconciliation Act (COBRA), a law that protects employees by letting them continue the group health insurance coverage they enjoyed while employed for up to 18 months (and sometimes longer) after their termination. (As with any law, there are exceptions. Not every employer is governed by COBRA’s rules – for example, COBRA only applies to employers who have 20 or more employees.)

However, many people don’t know that they can continue their health insurance coverage, and often employers inadequately inform their employees of their rights under COBRA, or simply don’t inform them at all. This is illegal. COBRA requires employers to provide written notice to terminated employees of their coverage options.

Employers Are Still Getting it Wrong

Even though this has been the law for many years, employers unfortunately are still getting it wrong. Citigroup and Lowe’s have both been accused of failing to comply with COBRA notification rules, and the most recent high-profile lawsuit is against Starbucks. The plaintiff in that case has accused Starbucks of sending out confusing COBRA notices. The notice he received didn’t tell him how to enroll in his COBRA plan, and instead asked him to call a general human resources number and go to a web site. The notice also didn’t tell him other important information, such as how he could lose coverage, who the administrator of the plan was, or where he was supposed to send premiums for coverage.

This kind of information is important for employees who have lost their jobs in the best of times, but it is even more crucial now during a pandemic. The Department of Labor has issued new guidelines because of the coronavirus, as we have already discussed. These rules extend most of the deadlines involved in the administration of employee benefit plans, including health care plans. While welcome, these new rules won’t necessarily help if employees don’t even know about their options for continued coverage in the first place. Employers and other benefit plan administrators still have a duty to give employees a clear and easily understood explanation of their rights.

In times like this, it is more important than ever for employers to ensure that they are protecting their employees. If they are unwilling to do so, then employees have the right to file a lawsuit against them under a federal law called ERISA. Our firm specializes in ERISA cases, so if you or someone you know has been misled by a COBRA notice – or if you never received one at all – consider reaching out to Kantor & Kantor for a free consultation at 800-446-7529 or use our online contact form.

 

Contact Information