Class Action Claims Ryder Systems Sent Deficient COBRA Notices

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A proposed class action claims Ryder System, Inc. has failed to provide certain health plan participants with sufficient notice of their right to continued coverage after they’ve been terminated or otherwise lose insurance.

The 20-page suit says that instead of using the model COBRA notice issued by the U.S. Department of Labor, Ryder instead mailed former employees several documents that only purported to provide notice of their right to continued coverage. According to the case, these notices were missing critical details and offered only part of the required coverage information “in haphazard and piece-meal fashion.”

The company did this, the case alleges, “presumably to save Ryder money by pushing terminated employees away from electing COBRA.” As the sponsor of its group health plan, Ryder is required by the Consolidated Omnibus Budget Reconciliation Act (COBRA) to properly notify plan participants who lose coverage due to a qualifying event, such as termination, of their right to purchase healthcare coverage.

“Notice is of enormous importance,” the case attests. “The COBRA notification requirement exists because employees are not expected to know instinctively of their right to continue their healthcare coverage.”

The plaintiff, the husband of a former longtime Ryder employee who the case relays resigned from the company due to “unbearable harassment” in the workplace, says he and his wife were “confused and misled” by the defendant’s COBRA notices and lost their health insurance coverage as a result.

The lawsuit alleges Ryder’s COBRA notice was not “written in a manner calculated to be understood by the average plan participant” given it was missing critical information and broken up into several documents. According to the case, the documents left out certain legally required information, including:

• The address to which payments should be mailed;
• The identity of the plan administrator;
• An explanation of how to actually enroll in COBRA;
• A physical election form; and
• The proper date by which election must be made given the government’s extension of COBRA deadlines due to the pandemic.

Moreover, the suit says the defendant’s COBRA notice violated federal law because it failed to include “all required explanatory information.” According to the lawsuit, Ryder included in its notice a “catch-all” H.R. phone number, operated by a third party that purports to be the company’s benefits department, and instructs consumers to call the number to enroll without actually explaining how to do so.

The case alleges Ryder’s failure to provide sufficient COBRA notice is an attempt to discourage former employees from enrolling in continued coverage as a cost-saving measure.

The plaintiff alleges that the defendant’s deficient notice left him unable to make an informed decision regarding whether to elect for COBRA coverage, which ultimately caused him to lose health insurance and incur various medical bills.

The suit looks to cover participants and beneficiaries in Ryder System’s health plan who were sent a COBRA notice by the defendant in the form sent to the plaintiff during the applicable statute of limitations period as a result of a qualifying event as determined by Ryder’s records and who did not elect continuation coverage.

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