Files amicus brief in Bryant v. Walmart Stores, Inc.
Washington, DC – The ERISA Industry Committee (ERIC) has filed an amicus brief with the United States District Court for the Southern District of Florida in Bryant v. Walmart Stores, Inc. asking the Court to rule in favor of Walmart and not create new and unnecessary burdens related to COBRA plan communications. Bryant is one of a flurry of cases filed, primarily by one plaintiffs’ firm, impugning employers for listing contact information for their COBRA service providers on election notices, rather than for their formal “Plan Administrators,” as the plaintiffs in the lawsuits claim is required.
ERIC’s amicus brief is centered around the plaintiff’s misunderstanding of large employer health plans and the critical roles played by third-party administrators. Large employers almost uniformly use multiple outsourced service providers for notice requirements and benefits administration, working in collaboration with the employers’ internal benefits departments. In creating COBRA, Congress recognized the differences between how small employers and large employers would administer COBRA continuation and so provided flexibility for employers to determine the most appropriate entity to provide those plan services. Additionally, the Department of Labor’s (DOL) regulations similarly do not require the employer to utilize a specific entity or individual to provide those administration services (whether internal or external), and do not require employers to identify the internal “Plan Administrator” on the notices, when that entity might not be directly responsible for administering a COBRA benefit, or even the right point of contact for a potential beneficiary with questions. The regulations instead require the election notices to name the entity that is responsible for COBRA administration—be it the plan sponsor’s benefits department, the health insurance carrier, or a third-party administrator—to ensure that beneficiaries know whom to contact when they need assistance.
“It is vital that the Court confirm that employers’ longstanding practices are in full compliance with the Department of Labor’s regulations. This confirmation will protect and help recipients of election notices, as well as large plan sponsors,” explained Annette Guarisco Fildes, President and CEO of ERIC. “This is not an issue affecting just one company, but many large employers across all industries, who have all been sued for providing COBRA notices that comply with the DOL rules and give recipients the right contact information. More than 30 ERIC member companies have been subjected to similar class-action complaints, forcing them to engage in expensive and time-consuming litigation that does not help beneficiaries with their benefits.”
This case has the potential to affect the information millions of separated employees receive regarding potential COBRA benefits, as well as their ability to have their individual questions answered about COBRA benefits in a timely and accurate way. The plaintiffs’ argument gives employers two losing options: employers can continue to direct beneficiaries to the actual party responsible for COBRA administration and risk penalties under the law, or they can revise their notices to provide the address and phone number of the “Plan Administrator” even when that administrator plays no role in COBRA administration, confusing beneficiaries, and wasting valuable time and resources directing questions back to the actual service provider managing the plan’s COBRA benefits.
“The Court must rule to protect beneficiaries and their ability to access timely and accurate information on their COBRA coverage and enrollment. Now is the time to put an end to future frivolous lawsuits alleging hyper-technical deficiencies in COBRA election notices where no deficiencies exist,” said Guarisco Fildes.
Click here to read ERIC’s brief.