Employers Should Be Careful in the Wording of Their Cobra Notices

Employers should be aware that the federal COBRA law requires employers with 20 or more employees to allow workers to temporarily continue their health coverage after they have been terminated or experienced a qualifying event.  The statute requires employers to notify workers of their COBRA rights, dictates what information must be included, and when the notices must be sent.  Employers that violate these requirements may face penalties of up to $110 per day for each affected individual.  Numerous cases have been brought against employers for technical failures in these notices, resulting in large settlements.  Target settled such a case for $1.6 million, and Wells Fargo for $1 million, for example. 

As an example, a court allowed the case to proceed on the basis that the plaintiff had plausibly alleged the company’s COBRA notices improperly omitted the specific deadline for electing coverage and included contradictory statements about when payment was due.  Marrow v. E.R. Carpenter Co., 2025 BL 291011 (M.D. Fla., 8/18/25).  The court did indicate in declining to certify the case as a class action, that the facts cast doubt on the worker’s claim she suffered injuries stemming from the company’s faulty COBRA notices.

This article is part of our December 2025 Newsletter. 

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