Bank of America Improper COBRA Notice for Terminated Employees Class Action

The Employment Retirement Income Security Act of 1974 (ERISA) was amended in 1985 with the Consolidated Omnibus Budget Reconciliation Act (COBRA), which permits certain employees who separate from a company to continue their coverage under the company’s health care plan for a limited period of time. The complaint for this class action alleges that Bank of America Corporation (BOA) does not provide terminated employees with proper notice of this benefit as required by COBRA.

The class for this action is all participants and beneficiaries in BOA’s health plan who were sent a COBRA notice by BOA in the form attached as Exhibit B to the original complaint in this case, during the applicable statute of limitations period as a result of a qualifying event, as determined by BOA’s records, and who did not choose continuation of coverage.

Under COBRA, employees who are terminated, within certain parameters, may pay a fee and choose to continue to be covered by the former employer’s health insurance for a number of months. At the time of separation, they must be given notice of this fact and instructions on how to take advantage of it.

The COBRA notice requirements are detailed, and serious enough that the Department of Labor (DOL) provides a Model Cobra notice form. However, BOA chose not to use that form when it terminated plaintiff Sheila Rodriguez. The complaint alleges that this was “presumably to save BOA money by pushing terminated employees away from electing COBRA.” This may be because, a Congressional research study says, the “average claim costs for COBRA beneficiaries exceeded the average claim for an employee by 53%.”

Instead of using the DOL form, the complaint says, “BOA 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.”

According to the complaint, “The deficient COBRA notices at issue in this lawsuit both confused and misled [Rodriguez]. It also caused [Rodriguez] economic injuries in the form of lost health insurance and unpaid medical bills, as well as informational injuries.”

The informational documents that were actually mailed to her were deficient in a number of ways, the complaint says.

For example, they did not include an address to which she should mail her COBRA payments. Also, there was no election form or other instructions as to how she could choose to participate in COBRA; instead, she was only given a general HR number that she was supposed to call to enroll, and information on a “website, operated by a third party but disguised as BOA benefits department,” rather than an explanation of how to actually enroll. The documents also do not identify the COBRA administrator.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Bank of America Improper COBRA Notice for Terminated Employees Complaint

June 3, 2020

The Employment Retirement Income Security Act of 1974 (ERISA) was amended in 1985 with the Consolidated Omnibus Budget Reconciliation Act (COBRA), which permits certain employees who separate from a company to continue their coverage under the company’s health care plan for a limited period of time. The complaint for this class action alleges that Bank of America Corporation (BOA) does not provide terminated employees with proper notice of this benefit as required by COBRA.

Bank of America Improper COBRA Notice for Terminated Employees Complaint

Case Event History

Bank of America Improper COBRA Notice for Terminated Employees Complaint

June 3, 2020

The Employment Retirement Income Security Act of 1974 (ERISA) was amended in 1985 with the Consolidated Omnibus Budget Reconciliation Act (COBRA), which permits certain employees who separate from a company to continue their coverage under the company’s health care plan for a limited period of time. The complaint for this class action alleges that Bank of America Corporation (BOA) does not provide terminated employees with proper notice of this benefit as required by COBRA.

Bank of America Improper COBRA Notice for Terminated Employees Complaint
Tags: ERISA Violations, Employment Violations, Improper COBRA Notice