Can I Sue My Employer for Not Offering COBRA?

can i sue my employer for not offering cobra

Can I sue my employer for not offering COBRA? Yes, under certain circumstances. Facing the loss of workplace health benefits, you’re entitled to COBRA coverage information. If neglected by your employer, it’s not only a breach of federal law but also a personal setback. This article cuts to the heart of the matter, outlining your lawsuit eligibility, the necessary steps, and what compensation could involve, all without overwhelming details or legalese.

Understanding Your COBRA Rights

COBRA is a federal law designed to help employees maintain their medical insurance coverage, also known as health insurance coverage, after job loss or other qualifying events. These qualifying events include incidents leading to the loss of health insurance, such as:

  • job termination

  • reduction in work hours

  • divorce or legal separation

  • death of the covered employee

  • eligibility for Medicare

The beneficiaries of COBRA include employees on the plan the day before the event, retirees, spouses, ex-spouses, and dependent children.

The benefits offered by COBRA are similar to those provided to current employees, extending even to specialized plans like dental. In some states, additional coverage is offered for smaller employer groups after Federal COBRA ends, such as Cal-COBRA, which offers up to 36 months of additional coverage.

To be eligible for COBRA, you must be a qualified beneficiary, with coverage durations ranging from 18 to 36 months depending on the event. Small businesses with under 20 employees may fall under state laws such as Cal-COBRA. It’s imperative to understand these rights and obligations to ensure you receive the coverage you’re entitled to.

Identifying Employer Missteps with COBRA Notices

Employers have a legal obligation to provide eligible employees with an initial notification upon joining the group health plan and a subsequent notification following any qualifying event. It is crucial for employers with 20 or more employees to offer COBRA coverage and to notify employees and other qualified beneficiaries within 44 days of a qualifying event. This obligation holds significant importance due to its impact on ensuring access to continued health insurance..

However, not all employers adhere to these legal requirements. Some fail to adhere to the mandated timeline for notifying employees of their COBRA rights, while others provide COBRA information that contains inaccuracies. These issues, whether it’s providing incorrect COBRA information or failing to notify in a timely manner, can be identified by legal professionals.

Non-compliance with these regulations can potentially lead to legal actions against employers, especially if the notices were not comprehensible to an average plan participant or did not fully comply with regulatory standards.

If an employer fails to provide adequate notice of COBRA rights, they may be held liable for an employee’s medical bills incurred during the period of non-coverage. This legal recourse can be a significant help for terminated employees, who can increase their chances of legal success by focusing on the employer’s omission to inform about COBRA rights and the subsequent unreimbursed medical expenses.

Moreover, if an employer acted in bad faith with respect to COBRA obligations, courts may require them to pay the legal expenses of the employee. This underscores the importance of understanding your COBRA rights and the potential legal recourse you have if those rights are violated.

The Cost of Non-Compliance: Penalties Employers Face

Employers who fail to comply with COBRA regulations can face significant penalties, including:

  • A fine of $110 per day for each qualified beneficiary

  • The cost of medical expenses incurred by the beneficiary

  • Attorney’s fees

  • Other damages

In certain cases, courts have the discretion to apply statutory penalties and may also order additional relief for COBRA noncompliance.

Even if employers act in bad faith, penalties may still be assessed at a lower rate, such as $50 per day. However, damages for COBRA violations are typically limited to unreimbursed medical expenses, less any premiums and deductibles that would have been owed, and do not include recovery for emotional distress. The Internal Revenue Service (IRS) also holds the authority to enforce excise taxes on employers for COBRA violations. This shows that the costs of non-compliance can be high, both financially and legally.

When to Elect COBRA Continuation Coverage

Once you’re eligible for COBRA, you have a 60-day period to elect continuation coverage starting from the day your employer-sponsored benefits end. It’s crucial to act promptly, as eligible individuals must sign up for COBRA within 60 days after being notified, or they risk losing the opportunity to enroll.

Upon receiving a COBRA notice, you have 45 days to:

  1. Pay the first premium after submitting the enrollment form.

  2. If you miss the 60-day deadline to sign up, your COBRA coverage may be forfeited.

  3. However, if enrollment is made within the election period, COBRA coverage is retroactive to the date of the loss of the prior coverage.

This underscores the importance of timely action when electing COBRA continuation coverage, also known as continue medical insurance coverage, as outlined in the cobra election notice.

Impact of Not Receiving COBRA Benefits

Being denied COBRA benefits can have a significant impact. Employees may not be able to access COBRA benefits if:

  • Employers or plan administrators fail to send required paperwork within 44 days

  • Employers do not provide the same benefits as those offered to current employees

  • There are issues with separation or termination agreements

This can lead to significant emotional distress for employees who suddenly find themselves without health coverage. The financial burden can also be substantial, as employees may have to cope with the full cost of medical treatments or insurance premiums without employer assistance. This highlights the potential emotional and financial impact of not receiving COBRA benefits.

Steps to Take if Employer Denied COBRA Coverage

If you have not received a notice about your COBRA rights, the first step is to contact your former employer’s human resources department or, for Cal-COBRA, reach out directly to your health plan. If you are denied services at a healthcare provider’s office despite paying premiums, it’s crucial to contact the plan administrator promptly to confirm the reinstatement of your insurance and resolve any issues regarding the latest premium payment.

Moreover, keep all receipts for medical expenses you incur while your COBRA coverage is in question. These may be indispensable for reimbursement claims once the issue is resolved and your insurance is reinstated. By taking these steps, you can ensure you’re doing everything in your power to secure your COBRA coverage.

Can I Sue My Employer for Not Offering COBRA?

In certain cases, yes, you can sue your employer for not offering COBRA. Employers are obligated to inform eligible employees about the availability of insurance coverage under COBRA and the requirement for employees to pay the full premium. Failure to receive COBRA notification from an employer can result in a lack of coverage for a period of time, leading to potential legal action for reimbursement.

Employees can take the following actions if their employer is not complying with COBRA:

  1. Contact the Department of Labor to report the non-compliance, which may result in fines for the employer.

  2. Request reimbursement from the employer for any costs incurred due to the non-compliance.

  3. If the employer refuses to reimburse, employees can sue in small claims court for up to $10,000 in damages.

It is recommended that employees first try to resolve the issue with the employer before taking legal action.

How Can I Sue My Employer for Not Offering COBRA?

If you find yourself in a situation where you need to sue your employer for not offering COBRA, there are several steps you can take:

  1. Sue in small claims court for failing to provide COBRA notification, which could result in damages up to $10,000.

  2. Before filing a lawsuit, contact the former employer requesting reimbursement for costs incurred due to the lack of COBRA coverage.

  3. If the employer has not complied with COBRA regulations, contact the Department of Labor to potentially impose fines on the employer.

To build a strong case, you must prove the amount you had to pay out-of-pocket, which could be reduced by the amount you would have paid for the COBRA premium. It’s important to understand the specific violations related to COBRA obligations and be aware of your rights before initiating a lawsuit.

Collecting and preserving documents such as employment contracts, company policies on health benefits, and any communications regarding COBRA can be essential for building a case. Being discreet at work while preparing for potential legal action is advised to avoid exacerbating the issue or giving the employer grounds for termination unrelated to the COBRA violation. It’s also important to act promptly, as there are statutory deadlines for filing a claim related to employment law violations.

Finally, consulting with an employment law attorney is critical, as they can provide guidance, assess the merits of the case, explain legal options, and help navigate the complexities of COBRA litigation.

Case Studies: Successful COBRA Claims Against Employers

To understand the risks and consequences of non-compliance with COBRA notice requirements, it’s helpful to look at some case studies. One such case involved a major retailer, Costco. The courts held Costco accountable for not adhering to the specific requirements of COBRA notices. The COBRA notice issued by Costco was criticized for being unclear, containing ambiguous threats, and lacking required details.

Ultimately, Costco’s settlement in the class action lawsuit amounted to $750,000. This case serves as a stark reminder of the financial risks of non-compliance with COBRA notice requirements. It underscores the importance of employers adhering to these requirements and the potential for successful legal action when they do not.

The Role of a Lawyer in COBRA Disputes

A lawyer plays a critical role in COBRA disputes. They critically review COBRA Election Notices for completeness of necessary information and adherence to legal requirements. They also verify that the language and presentation of COBRA notices are understandable to the average plan participant, as legally mandated.

In addition, legal professionals evaluate how closely a COBRA notice follows the Department of Labor’s model notice for compliance. Employment law attorneys also ensure that clients seeking guidance on COBRA issues receive all available legal remedies, starting with an initial free consultation. This highlights the invaluable role lawyers play in navigating COBRA disputes and ensuring that your rights are protected.

can i sue my employer for not offering cobra

Protect Your Rights and Secure Your Benefits with BLG

COBRA coverage is a crucial safety net for employees following job loss or other qualifying events. Understanding your rights under COBRA, recognizing employer missteps, and knowing the steps to take if denied coverage can protect you from significant financial and emotional distress. Employers face substantial penalties for non-compliance, and employees have legal recourse in such cases. By knowing when to elect COBRA continuation coverage, understanding the impact of not receiving benefits, and being aware of how to sue an employer for not offering COBRA, you can navigate your employment journey with confidence and assurance.

If your employer has failed to offer you COBRA coverage, you may have grounds for a lawsuit. Understanding your rights and the legal steps you can take is crucial. At BLG, our experienced attorneys are here to help you navigate this complex situation and ensure you receive the benefits you deserve.

Contact us today for a free consultation.

Frequently Asked Questions

What is COBRA and who is eligible?

COBRA is a federal law that provides a temporary extension of health insurance coverage after job loss or other qualifying events. Eligible beneficiaries include employees on the plan the day before the event, retirees, spouses, ex-spouses, and dependent children.

What are some common mistakes employers make with COBRA notices?

Employers often make mistakes with COBRA notices such as failing to provide timely or accurate notifications, not informing employees within 44 days of a qualifying event, and providing information with inaccuracies. Be sure to adhere to these guidelines to avoid errors.

You can hold your employer liable for medical bills and seek reimbursement for expenses if you’re denied COBRA coverage.

What are the penalties for employers who don’t comply with COBRA regulations?

Employers who don’t comply with COBRA regulations can face fines of up to $110 per day for each qualified beneficiary along with additional costs such as medical expenses and attorney’s fees. It’s important to adhere to COBRA regulations to avoid these penalties.

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