1. Hersh v. National Distributing Co.
Employer required to pay $1,000,000 in medical claims, plus $60,000 in legal fees for mistakenly terminating COBRA coverage.
2. McDowell v. Krawchison
Employer fined $100,000, plus appellate proceedings expenses, for failure to properly notify spouse of COBRA rights. Notice was given verbally and did not satisfy notice requirements for spouse.
3. Phillips v. Riverside, Inc.
Employer ordered to pay $41,797, plus attorney fees, for compliance failure of (in house) procedures.
4. Kidder v. H&B Marine, Inc.
Employer required to pay $25,000 in medical claims because they did not believe they were large enough to fall under the requirements of COBRA.
5. Gaskell v. Harvard Cooperative Society
Employer required to extend COBRA an additional year because of failure to provide “timely” notification of continuation rights.
Hand Delivery of COBRA Documents to “Ex-Spouse” Invalid
This case points out why it is not a good idea to hand deliver COBRA documents to qualified beneficiaries. First class mail is always the preferred delivery method.
(Phillips v. Saratoga Harness Racing, Inc., U.S. District Court, Northern District of New York, Dkt. No. 96-CV-1587)
Employer Heavily Penalized for Failure to Give COBRA Notice
The employer mistakenly relied on its Employee Handbook instead of sending the required COBRA notice. The court awarded ERISA penalties in the amount of $27,610; Attorney’s fees in the amount of $23,730; and court cost in the amount of $229.
(Holford v. Exhibit Design Consultants, U.S. District Court, Western District of Michigan, SD, Dkt. No. 5:05-CV-66)
Employer Tries to Recover $36,000 Spent in Defending Meritless COBRA Suit, But Court Awards Only $3,500.
An employer who was sued for COBRA violations was forced to defend itself at a cost of more than $36,000, even though the suit was ultimately dismissed as having no merit. The court awarded the employer only ten percent of its actual cost.
(Moreno v. St Francis Hospital & Health Center, U.S. District Court, ND Illinois, Dkt. No. 01-C-64)
Under ERISA, it is the plan administrator, not the insurance company, who is obligated to comply with COBRA regulations. ERSIA defines “administrator” as the person specifically designated as such under the of the plan documents. If, no plan administrator is designated, then it is the employer/plan sponsor that is responsible for COBRA administration.
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