We have been monitoring an increase in litigation relating to COBRA election notices in recent months.  The plaintiffs in these cases allege that COBRA election notices are deficient, and as a result, the plaintiffs, on a class basis, should be awarded a $110/per day per participant penalty (among other relief).  Many of these cases allege deficiencies on notices that are substantially similar to the Department of Labor’s model notice. 

While none of these cases have fully worked through the courts, a number have settled for significant sums.  The settlement success has predictably spurred more complaints and suits.

In a positive development last week, a COBRA election notice suit against Walmart (Bryant v. Walmart) in the U.S. District Court for the Southern District of Florida was dismissed by agreement of the parties following a recommendation from a magistrate judge to deny the plaintiff’s motion for class certification. 

While this is welcome news, we recommend plan sponsors review COBRA election notices for improvements in light of the recent litigation. 

As you may recall, COBRA election deadlines have been modified by the Department of Labor and IRS during the “Outbreak Period,” which began on March 1, 2020 and will end 60 days after the announced end of the COVID-19 National Emergency (unless another date is specified by the IRS/DOL).  If a person has a 60-day period of time that occurs during the Outbreak Period to take a specific action described in the COBRA election notice, then that 60-day period is extended until 60 days after the end of the Outbreak Period.