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McDonald’s COBRA Class Action Lawsuit – Deceiving Employees Through Improper Insurance Notices…

McDonald’s Allegedly Sent Ex-Employees “Deficient” COBRA Notices, Class Action Says

McDonald’s Corporation faces a class action lawsuit alleging that the fast-food giant failed to properly notify workers of their rights to continued health insurance coverage by the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Ashley Johnson v. McDonald’s Corp.

Click to access Ashley-Johnson-v.-McDonalds-Corp..pdf

McDonald’s Allegedly Omitted Critical Information From Workers

According to the McDonald’s COBRA Class Action Lawsuit, the plan sponsor of a group health plan is required by COBRA to notify beneficiaries of their right to continuation health coverage if their existing coverage is terminated or another qualifying event occurs. 

However, the suit alleges that McDonald’s unlawfully omitted critical information from its COBRA notices and provided only a few details in a haphazard and piecemeal approach throughout several letters.

Although the US Department of Labor has provided a model COBRA form to facilitate employers in complying with federal law, the lawsuit alleges that McDonald’s has purposefully refused to use the form, likely to save money by discouraging workers from electing expensive COBRA coverage.

The purpose of COBRA’s notice requirements is to assist and facilitate individuals in electing continuation coverage if they so choose, not to discourage them, as the defendant’s notice does, the complaint states, emphasizing that a COBRA notice must be written in a manner that is calculated to be understood by average plan participants.

McDonald’s allegedly followed a part of the Department of Labor’s model notice, only to the extent that it benefited the company. 

In addition, according to the action, the defendant’s COBRA notice, which was supposedly distributed in multiple mailings instead of as a single document, lacked critical information, including:

  • Explanation of how to enroll in COBRA;
  • The address to which payments for COBRA should be mailed;
  • The time period during which election must be made;
  • A physical election form; and
  • “All explanatory information,” including how coverage can be lost prematurely.

McDonald’s COBRA notice, the lawsuit argues, “confused and misled” the plaintiff, who worked for the company until September 1, 2020. Since the plaintiff failed to understand the defendant’s COBRA form, she was incapable of making an informed decision about whether to elect COBRA coverage, and as a result, she lost health insurance, the claim alleges.

McDonald’s Actions Resulted in Workers Losing Medical Coverage

The McDonald’s COBRA Class Action Lawsuit continues by stating that in May 2020, the Government extended the COBRA enrollment deadline to prevent individuals from losing medical coverage amid the COVID-19 pandemic. Thus, the lawsuit states that COBRA enrollment and payment deadlines that happened during the COVID-19 outbreak period must be disregarded for up to one year.

This indicates that the plaintiff’s deadline to enroll in and pay for COBRA would have been extended by at least a year, or until the Government declared a “National Emergency” over COVID, as stated in the lawsuit. 

This would have allowed the plaintiff to retain her health insurance and pay for it later after finding a new job (which she eventually did).

McDonald’s, the claim alleges, failed to inform COBRA form recipients of the payment extension and the lack of consequences for non-payment within that timeframe.

Editor’s Note on McDonald’s COBRA Class Action Lawsuit:

This article is written to inform you of the latest case brought against McDonald’s for allegedly failing to inform its workers regarding their right to continued health insurance coverage under COBRA. A similar lawsuit was also filed against Costco.

Case Name & No.: Ashley Johnson v. McDonald’s Corp., Case No. 1:21-cv-24339

Jurisdiction: U.S. District Court for the Southern District of Miami

Allegations: McDonald’s wasn’t transparent with its COBRA notices.

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