A COBRA Administration Partner Can Help You Avoid Lawsuits Like These!

cobra administration partner

The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) requires strict compliance for covered employers. Recent waves of COBRA class action lawsuits reinforce the need for employers to maintain constant compliance to avoid devastating judgements or settlement payouts. It’s no wonder why COBRA is the most commonly outsourced HR function. Even the most confident HR professionals can slip up, and mistakes could cost their organization severely.

In the past year, we’ve seen several high profile examples of costly COBRA class action lawsuit payouts. According to Bloomberg Law, McDonald’s faced a class action lawsuit alleging that it “sends confusing and legally deficient notices…”, leading to a final settlement of $156,783. McDonald’s is far from the only employer to settle a class action lawsuit for insufficient notices. Ryder System settled a class action lawsuit that alleged their notices were insufficient, leading to a $390,000 settlement. In both cases, insufficient notices led to large payouts that could have been avoided.

Just this month, Amazon agreed to a settlement in a class action lawsuit brought against them regarding their COBRA notices. According to HR Dive, the class action lawsuit claimed that Amazon’s COBRA notices “discouraged individuals from electing continuation coverage” after a qualifying event. Currently, the terms and/or amount of Amazon’s settlement have not been announced.

These are just a few examples of the many recent lawsuits regarding improper COBRA administration. Mistakes can lead to massive monetary payouts by employers that can be avoided with the help of a trusted COBRA administration partner like BASIC!

BASIC specializes in compliance to help you avoid COBRA violation penalties. For over 30 years, BASIC’s proven administration model and industry certified experts have helped employers of all sizes across the United States remain compliant and avoid devastating legal payouts. Our superior technology and best-in-class employer tools allow us to exceed DOL notification timeframe guidelines and drastically reduce an employer’s risk. And since COBRA compliance can be complicated when administered correctly, outsourcing COBRA to BASIC frees up valuable time and energy that is better spent managing your active employees.

BASIC COBRA Administration and continuation coverage is now integrated into our Consumer Driven Accounts (CDA) benefits platform, a state-of-the-art benefits system that removes the need for multiple complex administrative programs. Spend less time in the weeds and more time on what matters – your employees!