A myriad of major companies such as Marriot International Inc., Walmart Inc., and Nestlé Waters North America have been or are currently involved in legal battles regarding "deficient notices to former employees about their right to continued coverage under the companies’ group health plans." With COVID-19 pushing millions of Americans into unemployment, defense attorneys are expecting big corporations to face steep penalties from alleged violations of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Bloomberg Law explains that COBRA "requires employers with group health plans covering 20 or more employees to notify each plan participant and beneficiary of their right to choose continued health-care coverage for limited periods of time under certain circumstances, such as voluntary or involuntary job loss, reduction in hours, transition between jobs, death, divorce, or other life event."
Historically, attorneys have seen a correlation between economic downfall and an increase in lawsuits. More layoffs do not necessarily equate more insufficient notices, or litigation though. Managing Partner Chad Justice is quoted stating that "not every COBRA form is deficient," however, "when companies try to get too fancy with their language and how they administer the notices, [then] they get into trouble."
To read the full article from Bloomberg Law, click here.