Law Office of Mike Forni - COBRA Litigation

What is COBRA?

President Reagan signed the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") into law on April 7, 1986. Under COBRA, certain employers are
required to offer continuous health care coverage (such as, medical, dental,
vision, cancer insurance, etc.) to employees that were covered under the
employer's group health plan after they experienced a "qualifying event."
The most common "qualifying event" is a termination of employment. Prior to the
enactment of COBRA, individuals that were terminated would lose their health care
coverage. Now, an employee can elect to maintain his or her health care coverage
(including dependents if they were covered under the plan at the time of the qualifying
event) for up to 18 months (with an additional 11 months for a disability). There are
also special situations where a covered spouse or dependent may also elect COBRA
coverage for up to 36 months.

What is the initial "Notice Requirement" under COBRA?

Initial Notice. Every employer that is subject to COBRA is required to send an "Initial"
COBRA notice to all of its covered employees (under the health plan). The purpose of
the Initial COBRA notice is to inform each covered employee of his or her right to
continue their health care benefits under COBRA. The Department of Labor issued
new regulations (generally effective January 1, 2005) clarifying the timing
requirements and methods for issuance of the Initial Notice. The Initial Notice must be
sent within 90 days following the date that coverage under the group health plan
commences and must be issued to each newly covered person. The Initial Notice can
be issued separately or contained in the Summary Plan Description. The new
regulations also require several new notices which we can discuss during your
consultation.

No Notice or Election Forms. If you were never provided a COBRA notice or
election forms after your termination of employment, you may have legal recourse
against the Plan Administrator. Please Contact Us immediately to review the facts of
your case and determine whether you have legal recourse.

What kind of lawsuits involve COBRA?

Failure to Provide COBRA Notices. As stated above, if the employer (plan
administrator) of a group health plan fails to provide a terminated employee (that was
also a participant in the employer's group health plan) with one of the required notices
under COBRA, the employer and/or administrator may be liable for the unpaid claims
and a penalty of $110 for each day the failure has occurred.

Bankruptcy. Even though a company may declare bankruptcy, the courts will
sometimes require a successor or an affiliated company (e.g. Subsidiary or parent
company) to accept responsibility of the bankrupt company's COBRA obligations.

Mergers or Acquisitions. In complex transactions, there is usually negotiations on
which company will accept the target company's COBRA obligations. In addition, the
IRS has issued regulations on which entity is primarily responsible for the target
company's COBRA liability. If you have lost or been denied COBRA coverage after
your former company was merged into, or acquired by, another company, you may
have legal recourse to regain your COBRA coverage.

Gross Misconduct.   If an employee is terminated because of "gross misconduct",
then the employer is not required to offer the terminated employee continuing health
coverage under COBRA.   There have been several cases that have analyzed
whether the alleged acts are considered "gross misconduct."

If you would like us to investigate your COBRA situation, please Contact Us and
describe your situation.








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