A proposed class action filed against Coca-Cola Beverages Florida, LLC claims the company failed to properly notify employees of their right to continued healthcare under Consolidated Omnibus Budget Reconciliation Act (COBRA), which led to losses in coverage.
An amendment to the Employee Retirement Income Security Act (ERISA), COBRAis designed to help provide health insurance coverage where gaps would otherwise occur, such as after a change in job status, the case explains. Importantly, COBRA allows employees to continue healthcare coverage under a company’s plan for both themselves and “qualified beneficiaries” in their family for up to 18 months after termination so long as the employee was not accused of “gross misconduct,” the lawsuit says. A major requirement under COBRA, the case explains, is that plan sponsors must provide notice to everyone who could lose coverage as a result of a qualifying event (e.g., voluntary or involuntary termination, reduction of hours, etc.) and allow them to elect to continue coverage.
According to the suit, a notification of “continuation coverage” must be written in a way that is understandable to the average plan participant. A COBRA notice must include, among other information, the name of the plan, contact information for the plan administrator, an explanation of the maximum period of time in which continuation coverage is available, identification of qualified beneficiaries, and a description of the coverage available under the plan, the complaint states. Moreover, COBRA notifications must be sent within 44 days of termination if the employer is also the healthcare plan administrator.
The lead plaintiff alleges that he was terminated by Coca-Cola in October 2018 and subsequently received a COBRA notice that failed to meet the previously described legal requirements. According to the plaintiff, the notice came in February 2019, well after the 44-day deadline. Moreover, the notice allegedly was not written in a way that was understandable to the average participant and failed to provide contact information for the administrator, an explanation of the continuation coverage end date, and the name of the plan. As a result, the suit says, the plaintiff lost his primary healthcare coverage, claiming he was unable to make an informed decision as to whether to elect COBRA continuation.
“Without information on when COBRA coverage ends or who is the Plan Administrator, or even the name of the Plan itself,” the complaint reads, “a notice simply is not written in a manner calculated to be understood by the average plan participant.”
The suit seeks to represent a “deficient notice” class that may be comprised of:
“All participants and beneficiaries in the Defendant’s Health Plan who were sent a COBRA notice by Defendant during the applicable statute of limitations period as a result of a qualifying event, as determined by Defendant, who did not elect COBRA.”
Similarly, the case looks to cover an “untimely notice” class comprised of:
“All participants and beneficiaries in the Defendant’s Health Plan in the United States who were entitled to be provided notice of their COBRA rights due to a qualifying event pursuant to 29 U.S.C. §1163(a)(1), (2) and(4) and who were not provided a COBRA notice in the timeframe mandated by 29 U.S.C. §1166, within the applicable statute of limitations.”