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Bank of America Deficient COBRA Notice to Separating Employees Class Action

The Consolidated Omnibus Budget Reconciliation Act (COBRA) sets forth rules that allow employees of certain large employers to retain their health insurance benefits after they separate from the company. However, the complaint for this class action alleges that the Bank of America (BOA) Corporation Corporate Benefits Committee deliberately gives departing employees inadequate information on the COBRA program so that they do not continue their health insurance benefits.

The class for this action is all participants and beneficiaries in BOA’s Health Plan who were sent a COBRA notice by BOA Corporation Corporate Benefits Committee, in the form sent to the plaintiff in this case, during the applicable statute of limitations as a result of a qualifying event, as determined by BOA’s records, who did not elect continuation of coverage.

COBRA benefits are costly for companies. The complaint quotes a Congressional research study as saying, “[T]he average claim costs for COBRA beneficiaries exceeded the average claim for an active employee by 53%. The average annual health insurance cost per active employee was $7,190, and the COBRA cost was $10,988.14.”

The Department of Labor publishes a model COBRA form that companies may use to make sure they fulfill all requirements pertaining to giving employees notice about COBRA. However, the complaint says that BOA did not choose to use this form, “presumably to save BOA money by pushing terminated employees away from electing COBRA.”

Companies are required to give departing employees all required information in a single document. However, the complaint alleges, “BOA instead opted to break the information into multiple documents, mailed separately under different cover, containing bits and pieces of information on COBRA, both of which are still missing critical information.”

For example, the COBRA Enrollment Notice sent to plaintiff Jim Gaffney after his termination does not include an address to which Gaffney can mail his COBRA payments.

Also, the complaint says, it does not itself explain how to enroll in COBRA or include a COBRA election form. Instead, it directs would-be enrollees to call a “catch-all” general HR phone number, that the complaint says “is operated by a third party disguised as BOA benefits department.

Also, the notice provided Gaffney does not include information on how, once registered, a person might lose the benefits prematurely, for example, by making late payments. The complaint alleges that it does not provide all explanatory information.

Because the information he was given was inadequate, the complaint says, Gaffney “suffered a tangible injury in the form of economic loss, specifically the loss of insurance coverage and incurred medical bills, due to BOA deficient COBRA forms.”

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Bank of America Deficient COBRA Notice to Separating Employees Complaint

November 24, 2020

The Consolidated Omnibus Budget Reconciliation Act (COBRA) sets forth rules that allow employees of certain large employers to retain their health insurance benefits after they separate from the company. However, the complaint for this class action alleges that the Bank of America (BOA) Corporation Corporate Benefits Committee deliberately gives departing employees inadequate information on the COBRA program so that they do not continue their health insurance benefits.

Bank of America Deficient COBRA Notice to Separating Employees Complaint

Case Event History

Bank of America Deficient COBRA Notice to Separating Employees Complaint

November 24, 2020

The Consolidated Omnibus Budget Reconciliation Act (COBRA) sets forth rules that allow employees of certain large employers to retain their health insurance benefits after they separate from the company. However, the complaint for this class action alleges that the Bank of America (BOA) Corporation Corporate Benefits Committee deliberately gives departing employees inadequate information on the COBRA program so that they do not continue their health insurance benefits.

Bank of America Deficient COBRA Notice to Separating Employees Complaint
Tags: ERISA Violations, Employment Violations, Improper COBRA Notice