August 4, 2022 – Parties Agree to Settle McDonald’s ERISA Lawsuit
The parties in the case detailed on this page notified the court on July 12, 2022 that they had reached a class-wide settlement.
No details about the deal have been filed with the court yet, and the parties have asked for 45 days to submit their motion for preliminary approval of the settlement.
Don’t miss out on settlement news like this. Sign up for ClassAction.org’s free weekly newsletter here.
McDonald’s Corporation faces a proposed class action that claims the fast-food giant has failed to provide workers with proper notice of their right to continued health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
According to the 21-page case, the plan sponsor of a group health plan is required under COBRA to provide qualified beneficiaries with notice of their right to continuation health coverage should they lose their existing coverage as a result of termination or other qualifying event. The suit alleges, however, that McDonald’s has unlawfully left critical information out of its COBRA notices, and instead offered only some details “in haphazard and piece-meal fashion” and spread out over several letters.
The case claims that although the U.S. Department of Labor has issued a model COBRA form in order to facilitate compliance with the federal law, McDonald’s has intentionally refused to use the form, presumably to save money by discouraging employees from electing expensive COBRA coverage, per the suit.
“The purpose behind [COBRA’s] notice requirements is to facilitate and assist individuals in electing continuation coverage should they so choose, not discourage them from doing so as Defendant’s does,” the complaint scathes, stressing that a COBRA notice must be written in a manner calculated to be understood by the average plan participant.
McDonald’s, the lawsuit alleges, adhered to part of the Department of Labor’s model notice, but only to the extent that it served the company’s best interests. Per the suit, the defendant’s COBRA notice, which was supposedly sent not as a single document but over the course of multiple mailings, omitted critical information, including:
The address to which COBRA payments should be mailed;
The time period during which election must be made;
An explanation of how to enroll in COBRA;
A physical election form; and
“All explanatory information,” including how coverage can be lost prematurely.
The lawsuit claims McDonald’s COBRA notice “confused and misled” the plaintiff, who worked for the defendant until her separation from employment on September 1, 2020. Because the plaintiff did not understand the defendant’s COBRA form, she was unable to make an informed decision as to whether to elect COBRA coverage and ultimately lost out on health insurance as a result, the suit says.
The case goes on to state that the government in May 2020 extended the deadline to enroll in COBRA to prevent people from losing their medical coverage during the COVID-19 pandemic. Thus, COBRA enrollment and payment deadlines that occurred during the COVID outbreak period must be disregarded up to one year, the filing says.
“This means that Plaintiff’s deadline to enroll and pay for COBRA would have been extended by at least one year, or at least until the Government declared the ‘National Emergency’ related to COVID was over,” the complaint attests. “This would have permitted Plaintiff to keep her health insurance and pay for it later once she got another job (which she eventually did).”
According to the suit, McDonald’s failed to inform COBRA form recipients of the extension for payment and lack of consequences for non-payment during that timeframe.
Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.
Camp Lejeune residents may soon have the opportunity to claim compensation for harm suffered from contaminated water.