Even a Fortune 500 company can struggle to keep up with COBRA notice requirements. Several lawsuits involving inadequate COBRA notices have been filed recently. Now a class action lawsuit against Pepsico, Inc. is moving forward.
The Surge in COBRA Notice Lawsuits
Earlier this year, we covered the recent spike in lawsuits over COBRA notices in Florida. These lawsuits involved multiple companies, and the allegations involved multiple claims of non-compliance, from notices that lacked clear instructions to notices that were sent in English only.
It’s interesting that these lawsuits were clustered in Florida, but it’s also important to remember that COBRA lawsuits can occur anywhere in the country.
The Lawsuits Continue
According to JacksonLewis, in addition to the lawsuits in Florida, there have also been recent lawsuits in New York. At least 10 household-name entities have been hit with COBRA lawsuits so far, and class action settlements could be for six or even seven figures.
One notable lawsuit involves Pepsico. According to Thomas Reuters, a class-action lawsuit against Pepsico, Inc. is moving forward after a federal court refused to dismiss it. The lawsuit claims that the COBRA notices sent by the company were missing key pieces of information, including the names and addresses of the plan administrator, the election procedures and the election form. The company argued that it had made a good faith effort to comply with COBRA requirements, but this was not enough to stop the lawsuit from moving forward.
Protect Your Company from Lawsuits
The recent surge in lawsuits should have employers of all sizes reassessing their current procedures for COBRA notices.
Make sure your company is following COBRA notice best practices:
- Pay attention to the little things. COBRA notices need to include a lot of very specific information. You might think a small detail – such as the name of the administrator – isn’t essential, but someone else might disagree. This is not an area where you can get sloppy or lax.
- Good intentions aren’t enough. Making a good faith effort to comply with COBRA requirements is a start, but as the lawsuit against Pepsico has proven, it may not be enough.
- Don’t ignore the DOL’s models for COBRA notices. The DOL provides model notices. This is a great resource that should not be overlooked.
- Use a professional administrator. COBRA requirements can get complicated. To make sure things are done right, you need a professional with proven expertise in COBRA administration.
- Get a proven COBRA administration system. Travisoft can keep you organized and help you comply with notice requirements.