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Best Buy COBRA Health Insurance Notices Class Action

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Stethescope with Sensor Rearing Up Like a Cobra

When the employee of a large company separates from that company because of a “qualifying event,” they are permitted to carry over their health care coverage for a period of time, under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). However, the complaint for this class action alleges that Best Buy Co., Inc. or Best Buy, LP does not provide employees with a COBRA notice that complies with the law.

The class for this action is all participants and beneficiaries in Best Buy’s Health Plan who were sent a COBRA notice by Best Buy during the statute of limitations period as a result of a qualifying event, as shown in Best Buy’s records, and who did not choose continuation coverage.

The Best Buy Health and Welfare Plan is governed by the Employee Retirement Income Security Act of 1974 (ERISA). The complaint alleges, “Despite having access to the Department of Labor’s Model COBRA form, Best Buy chose not to use the model form…”

Plaintiff Daniel Pruitt was terminated by Best Buy on November 6, 2019. Since the termination was not for gross misconduct, it was a qualifying event that permitted him to continue his health care coverage for a time under COBRA. He was mailed a form about such coverage by Best Buy on November 15. On the same day, it mailed him two other separate but different notices, including a “Conversion/Portability Notice” and a paper entitled “Important Information About Your COBRA Continuation Coverage.”

The complaint claims that the deficient forms used by Best Buy “confused and misled” Pruitt and cost him in the form of lost health insurance and unpaid medical bills.

How is the Best Buy notice deficient? First, it does not tell employees how to enroll in COBRA nor does it include a form they can use to do so. It simply directs them to call a “catch-all” HR number or go to a third-party website that’s meant to look like a Best Buy website.

Second, it does not include an address where COBRA payments can be mailed.

Third, it does not identify the plan administrator.

Fourth, it does not explain how COBRA coverage can be lost, for example by missing payments.

Finally, it does not provide all the explanatory information that is required. 

COBRA coverage is expensive for employers, says the complaint. It quotes a Congressional research service study as saying that the “average claim costs for COBRA beneficiaries exceeded the average claim for an active employee by 53%. The average annual health insurance cost per active employee was $7,190, and the COBRA cost was $10,988.14.” The complaint thus implies that Best Buy might not have wanted Pruitt to maintain his coverage.

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