COBRA Dental Coverage terminated by former employer

So I have a question that goes into some great detail. Being in the HR Field for 20 years, I know what is right and wrong on both sides.  I elected to continue my dental plan through COBRA with my former employer. They terminated my coverage prior to the end of the month (employees are still covered through the end of the month after they leave the company, per policy). I had to deal with that issue and got reinstated. I just assumed it was human error.

However, at the end of the year the company decided to change carriers effective 1/1. My insurance was terminated. I know, as a COBRA Administrator, you are required to notify everyone in the plans including COBRA participants of the plan change/termination. This is normally done, via certified mail, to protect the company and verify the individual received the proper paperwork.  This was not done. I found out more than 2 months later and 2 payments later (checks cashed) from my dental office - not the former employer. When the employer was contacted, via email, and phone, they failed to respond on a timely basis. In fact, they did not take care of it. I had to work directly with the broker! 30 days later it is somewhat fixed.

However, my coverage is half of what it used to be. I know it is in violation of ERISA DOL and COBRA to do what they did and I am seeking an ERISA attorney on this which by the way is practically impossible. However, I am curious if anyone knows what the penalties I would be entitled to for 2 participants? Would I also be eligible to be paid the difference in coverage loss, reimbursed for payments already paid, etc.? Has anyone had to deal with this from an employer side?


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  • Thanks so much for your question.

    If an employer modifies its coverage for active employees, it must do so for similarly situated COBRA beneficiaries as well. A modification to COBRA coverage is not itself a qualifying event triggering COBRA notice requirements, or the associated statutory penalties.

    However, qualified beneficiaries on COBRA coverage are entitled to the same benefits, choices and services that similarly situated participants are receiving under the plan, such as the right during an open enrollment season to choose among available coverage options. A COBRA beneficiary denied the information or assistance necessary to remain covered during such a change could potentially sue under ERISA for any benefits denied as a result, and possibly attorneys’ fees as well.

    In addition, ERISA notice penalties have been assessed in some COBRA cases. One ERISA requirement that may come into play, along with overall fiduciary obligations, is that a summary of material modifications must be distributed no later than 60 days after a plan change that results in a material reduction in covered services or benefits.

    I hope this information is helpful.

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