Class Actions Target COBRA Election Notices

In a time of widespread layoffs, there’s been a spate of class action lawsuits alleging that an employer’s’ COBRA “election notice” is deficient. Election notices are supposed to inform laid off or furloughed employees that they can continue to receive healthcare coverage, for some specified period of time. The allegations in these lawsuits, most of which are being handled by a single plaintiff firm in Florida, are that certain information specified in a Department of Labor model notice is lacking in the company’s version. The allegedly missing information ranges from the general – e.g. that it was not written in a way that could be understood by the average plan participant – to various particulars, such as that it does not provide the continuation coverage termination date. A number of large companies, including Lockheed Martin, have agreed to substantial settlements in lieu of running up litigation costs. This Today’s General Counsel article discusses potential legal defenses to these lawsuits, as well as what companies can do to reduce the chance they will be targeted.