Who has liability?
Question: If I have contracted with a third-party vendor to be my company's agent for COBRA notice purposes and that third party's notice does not meet the requirements of COBRA, who has liability?
Answer: As the employer, you – not the vendor – are ultimately responsible for your benefit plan compliance. The U.S. Department of Labor has published COBRA notice regulations, which contain 14 content requirements.
In a recent class action suit, plaintiffs alleged that they could not find the "election form" to elect COBRA coverage on the website to which they had been directed. They further alleged that the notice did not state the name and address of the party responsible for the administration of COBRA benefits and failed to provide COBRA election procedures or election forms. They said the website was misleading and confusing.
The case ultimately settled for $290,000, plus the payment of the plaintiffs' attorney's fees.
Recommendation: Check your COBRA notice now to make sure it meets the requirements of the COBRA notice regulations. Review the notice to satisfy yourself that anyone can easily understand it and elect coverage. Finally, in your agreement with your third-party vendor, make sure you have a provision that requires the third-party vendor to indemnify your company!
Note: Nothing in this SNPA Legal Hotline Q&A should be relied upon as legal advice in any particular matter.
L. Michael Zinser is the founding partner of The Zinser Law Firm in Nashville, Tenn. The firm, which has a heavy concentration of clients in communications media, represents management in the area of labor and employment. Zinser can be reached at (615) 244-9700 or firstname.lastname@example.org.
SNPA's free Legal Hotline for members – (844) 804-2016 – is designed to assist newspapers with a broad range of legal issues. Hotline attorneys and CPAs will tackle questions about circulation, independent contractors, labor and employment law, taxes, finances and accounting, employment benefits, open records, libel and privacy, and other issues newspapers encounter.
The attorneys and CPAs who will take calls from SNPA member newspapers are the best in the business: The Bussian Law Firm PLLC, Fisher & Phillips, Way, Ray, Shelton & Co., P.C. and The Zinser Law Firm.