Understanding Employee Benefits

Maintaining Poor COBRA Procedures Can be Expensive – Part 2

By | March 24, 2014

Back in 2013 I blogged about an employer who was ordered to pay a COBRA penalty of $1,852,500 to a class of employees to whom timely COBRA notices had not been sent. That amount was equal to $2,500 per affected participant. I mentioned that the class would also be entitled to attorneys’ fees yet to be awarded. The court has now awarded those attorneys’ fees. The case had continued for nine years and the court approved rates ranging from $325 per hour for the lead counsel through $125 an hour for paralegals. Class counsel requested payment for more than 1,300 hours in total. Although some hours were disallowed, in all the court approved $302,780 in attorneys’ fees and $11,444.97 in costs. Thus, the employer’s failure to maintain good COBRA procedures and records cost in excess of $2,000,000. As I mentioned before, failing to maintain proper COBRA procedures can be expensive.

Contact Benefits Notes for more information.

Health Care Reform