Target’s $1.6 Million COBRA Notice Settlement Offer: Employers, It’s Time to Review Your COBRA Election Notices
As we discussed in our prior blog post here, there are many reasons why an employer needs to review its template COBRA election notice, such as for the new extended COBRA deadlines as a result of the COVID-19 pandemic, the new DOL model notice, and dramatically increased class action litigation challenging the legal sufficiency of COBRA election notices. These cases have resulted in significant expenditures being incurred by the targeted employers. These cases typically allege that a deficient or misleading COBRA notice caused a former employee (or other COBRA qualified beneficiary) to lose health coverage because the notice lacked required information or was not written in an understandable manner. For example, plaintiffs recently proposed a $1.6 million class action settlement to resolve allegations that Target Corporation failed to provide adequate COBRA election notices. Many employers use third-party vendors to prepare and distribute their plans’ COBRA election notices; however, the employer still retains liability for the legal sufficiency of the notices. Now is the time for employers to review and revise their COBRA election notices before being named as a defendant in a lawsuit.