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Benefits

Hotel Chain Faces Class Action Lawsuit Over English-Only COBRA Notices

EBIA  

EBIA  

Vazquez v. Marriott Int’l, Inc., 2018 WL 1988875 (M.D. Fla. 2018) (Docket: Order Granting Plaintiff’s Motion for Class Certification (Aug. 7, 2018))

A federal court has granted class action status in a lawsuit brought by a former hotel employee who alleged that the hotel chain failed to provide adequate COBRA election notices. The employee claimed that the hotel’s deficient notice caused her family to lose health insurance for two months following her termination of employment, resulting in significant medical expenses and unpaid bills. She alleged that the hotel violated COBRA by failing to provide a notice in Spanish. Furthermore, the notice did not adequately explain election procedures or identify the hotel chain as the plan administrator, and it was not written so that an average plan participant would understand it. The class includes more than 15,000 hotel employees who received similar notices during the relevant time period but did not elect COBRA.

EBIA Comment: While COBRA class actions are relatively rare, the potential financial exposure is substantial—see our articles about recent COBRA class actions that resulted in liabilities of $1 million, $1.8 million, and $1.3 million. We wonder how far this former employee will get with her allegation that the hotel chain should have provided notices in Spanish. COBRA does not require notices to be translated into a non-English language for qualified beneficiaries who do not speak English, even though the DOL website includes Spanish versions of its model COBRA notices. (Note that language assistance or translation services are required for certain other benefit-related documents—see our Question of the Week regarding summary plan descriptions (SPDs), and our articles on claims-related documents and summaries of benefits and coverage (SBCs).) In contrast, the other alleged notice deficiencies would be clear violations of COBRA’s notice content requirements that could subject the hotel chain to statutory penalties of up to $110 per day per violation. Regardless of the ultimate disposition, this case serves as a stark reminder of the potential for costly litigation if notices are not carefully drafted. For more information, see EBIA’s COBRA manual at Sections XVIII.K (“Must Election Notice Be Translated Into Languages Other Than English?”) and XXV.H (“Procedural Issues in COBRA Lawsuits Under ERISA”).

Contributing Editors: EBIA Staff.

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