Amazon Corporate Improper COBRA Notice Class Action

The complaint for this class action begins with an overview statement: “[Amazon Corporate, LLC], the plan sponsor and plan administrator of the Amazon Group Health & Welfare Plan … has repeatedly violated ERISA by failing to provide participants and beneficiaries in the Plan with adequate notice, as prescribed by COBRA, of their right to continue their health insurance coverage following an occurrence of a ‘qualifying event’ as defined by the statute.”

ERISA is the Employee Retirement Income Security Act, which governs certain company benefits; COBRA is the Consolidated Omnibus Budget Reconciliation Act. COBRA’s purpose was, the complaint says, “to facilitate and assist individuals in electing continuation [health care] coverage should they so choose, not discourage them from doing so as Amazon’s does.

The complaint alleges that the COBRA notice form providing information on available COBRA benefits is improper. It alleges, “It is not written in a manner calculated to be understood by the average plan participant because it attempts to scare individuals away from electing COBRA by including an ominous warning suggesting that the submission of even “incomplete” information when electing COBRA may result in civil, or even criminal, penalties.”

It also “needlessly references a possible ‘$50 penalty from the IRS for each failure to provide an accurate tax identification number for a covered individual.’ This information is thrown into [Amazon’s] notice without context, much less with an explanation of why potential criminal penalties, or IRS penalties, are somehow relevant to the COBRA election process.”

The COBRA notice is important enough to have its own regulations set forth by the Secretary of Labor. This is because health insurance is important and workers can’t be presumed to know if and when they may choose to continue coverage when they are laid off or have some other “qualifying event.” It is important enough that the Department of Labor has put out a Model COBRA Continuation Coverage Election Notice. The law also sets penalties for not complying with the notice requirements.

Instead of using the Model Notice, the complaint says, Amazon “deliberately authored and disseminated a notice which omitted critical information required by law and needlessly included language meant to deter and otherwise ‘chill’ election of COBRA benefits, which are expensive for an employer.

Among other things, the notice also provided conflicting dates by which the election had to be made and did not identify the Plan Administrator.

The class for this action is all participants and beneficiaries in Amazon Corporate’s health plan who were given the COBRA notice, in the same form as sent to the plaintiff in this case, during the applicable statute of limitations period, due to a qualifying event, who did not elect COBRA.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Amazon Corporate Improper COBRA Notice Complaint

March 25, 2020

The complaint for this class action begins with an overview statement: “[Amazon Corporate, LLC], the plan sponsor and plan administrator of the Amazon Group Health & Welfare Plan … has repeatedly violated ERISA by failing to provide participants and beneficiaries in the Plan with adequate notice, as prescribed by COBRA, of their right to continue their health insurance coverage following an occurrence of a ‘qualifying event’ as defined by the statute.”

Amazon Corporate Improper COBRA Notice Complaint

Case Event History

Amazon Corporate Improper COBRA Notice Complaint

March 25, 2020

The complaint for this class action begins with an overview statement: “[Amazon Corporate, LLC], the plan sponsor and plan administrator of the Amazon Group Health & Welfare Plan … has repeatedly violated ERISA by failing to provide participants and beneficiaries in the Plan with adequate notice, as prescribed by COBRA, of their right to continue their health insurance coverage following an occurrence of a ‘qualifying event’ as defined by the statute.”

Amazon Corporate Improper COBRA Notice Complaint
Tags: Employment Violations, Improper COBRA Notice