I had so many requests for "what do I write my former employer / health plan administrator," I decided to write a sample demand letter.
If you are unable to get your Health Plan Administrator to send you COBRA documentation' resolve a complaint with a former employer or health plan administrator informally, then you may decide to take legal action. If the involves damages from your loss of medical insurance arise from their failure to send the required final (or other) notice, you need to send certified a demand letter before filing a claim in court. The letter should outline what happened, more specifically the harm you suffered from lack of health insurance, your attempts to contact them about getting the notice, and how you want the problem resolved.
The Health Plan Administrator must make a good faith response within a few days, or they could be subject to damages, IRS levies, DOL fines and legal fees. The Demand Letter encourage the Health Plan Administrator to negotiate and settle the claims out of court. It can also help establish the amount of monetary damages you can recover if the charges are proven in court.
Be realistic about the endgame
You should send a Demand Letter whether your action will be brought in Federal Court or small claims court for your damages if under $5,000 or $7.500 depending on your state. At this point, it's a really good idea to consult with a labor lawyer.
Information that to include in the COBRA Notice Demand Letter
To help the Health Plan Administrator meet their legal obligations, include in your Demand Letter:
Your full name and address
The description of the COBRA compliance failure including all the unfair or deceptive practices claimed, the dates involved in the transaction, and any other important facts. If you know the regulation number of the regulation violated, you may wish to include it. However, you are not limited to written regulations or laws.
Clearly explain the injuries you suffered as a result of the failure such as:
Failure to provide medical insurance which results in the non negotiated insurance rates.
Impact on your credit score if you have unpaid medical bills.
Un-insurability if you suffer a break in coverage of greater than 62 days.
Failure to provide you of your COBRA rights.
The demanded relief including the amount of money you are demanding to recover. It could also include the COBRA notice, Fines, and/or Payment for Damages.
Although it is not required by law, the 30-Day Demand Letter should be sent by certified mail, (without return-receipt), so that you will have proof of delivery. Send the letter by regular mail also, and keep a copy for your files.
Written Offer of Settlement
Once you mail the Demand Letter, the Health Plan Administrator should respond to you in writing. Usually you will get the paperwork, or they will send you a reason why you do not qualify for COBRA. You then must decide to either reject or accept the information.
The Court may find in your favor because:
The Health Plan Administrator did not document sending you sent the paperwork.
The Health Plan Administrator did not notify you within 14 days that you do not qualify for COBRA.
The employer never contacted the Health Plan Administrator about your loss of health insurance.
The Federal Court may also find a practice of non compliance with the Health Plan Administrator, and that their violation of the Consolidated Omnibus Budget Reconciliation Act was "willful or knowing," in which case, you may receive your actual damages, plus $110 per day in DOL fines.
If the Court finds in your favor, you may also be entitled to reasonable attorney’s fees and costs.
Word of warning: You may not want to send the letter below for many reasons:
It's mean. People tend to remember nasty letters when they are contacted via your resume to verify employment (forget about a recommendation). Consider the
much softer Sample #1 Sugar n Spice COBRA Demand Letter.
It could be expensive. Whenever you threaten litigation, you should be able to carry through. An experienced ERISA lawyer may require $2,500 to $5,000 just to start your case.
Have
you contacted the EBSA at 1.866.444.EBSA (3272), so they could contact your former HR? They might get more mileage.
It may not fit your situation. It has not been drafted by your lawyer or even a lawyer.
The letter may become outdated while I'm gardening. COBRA has been amended over a dozen times!
Not a substitute for licensed legal advice. Again, I'm not a lawyer.
I actually produce things. I'm just a guy that knows
a lot about COBRA.
Consumers are welcome to use it as a template (but not sold or used for commercial republishing).
The problem
may be the third party administrator. If they never get notified by your employer that you lost your health insurance, they might be in the dark. So cc everything to your employer.
Also, you have 44 days to get your COBRA notice. Don't send the letter if you've lost your health insurance a week ago.
They may have noticed you. An employer could actually e-mail or verbally give you the COBRA instructions, even though it's not recommended. Make sure they did not give you notice in unexpected, non traditional form.
The most em bar as sing: Do they have your old address? They are only required to send the final COBRA notice to your last known address (Unless informed of an updated address).
Lastly: have you tried something different? Make just one call but to a different higher up. Send an e-mail to the head of the department. Many companies put one person or rep in charge of COBRA, and usually when you need it, they are on sabbatical.
Use the below are your own risks!
Sample Angry Litigant COBRA Demand Letter*
Your name Your address Your telephone number
Date
Name of Health Plan Administrator
Health Plan Administrator
Dear Health Plan Administrator:
This is my second request under the provisions of the Consolidated Omnibus Budget Reconciliation Act, I am making another written demand for my COBRA notice election document [or request an unavailability notice if I do not qualify for COBRA].
[The description of the COBRA compliance failure]
On or about {date}, I (and ____________ ____________ ) lost my (our) health insurance. It's been_____ days past the 44 day requirement and I have not received my
required COBRA notification.
I wrote you a
friendly reminder two weeks ago on __ / __ / ____.
I left #_____ voice messages at phone number ___ - ____- ____ on _____ and ____.
I emailed ________ __________ at _______ @ _______ on _____ and ____.
To date I have not
gotten a sufficient response either providing me the COBRA notification, or an ineligibility letter.
Under COBRA, a final notice (Not counting the HIPAA or other required documents) must be sent "in a good faith manner that is reasonably calculated to ensure actual receipt of the material."
I believe you have my correct address as listed above.
[injuries you suffered]
As a result of your refusal to provide me the required documentation, I suffered injury or loss of money as follows:
{Indicate Money, COBRA rights, Credit Score, or Lack of Medical Care}
I have been denied my COBRA entitlement. I went to the doctor and paid ______ for medical services at an un negotiated rate since it has not been covered under my entitled health insurance. My credit has dropped significantly (or from ____ to ______), and I suffer from __________ as a result of not being able to afford my doctor prescribed medication. I also have bill collectors contacting me in an attempt to collect medical fees I do not owe.
[The demanded relief]
Therefore, I hereby demand the following relief:
I expect your good-faith response to this letter within ten (10) days. Your failure to do so will force me to report you and protect my rights. Which may include reporting your company to the IRS. They may conduct a health plan audit under TAMRA (Technical and Miscellaneous Revenue Act of 1988) to assess COBRA excise taxes of $100 per day for failure to follow COBRA rules.
You may also be required to self report COBRA compliance failures on IRS form 8928.
The DOL may conduct their own separate Investigation to determine under ERISA (Employee Retirement Income Security Act) notice penalties of up to $110 per date from the date of compliance failure.
From the 45th day after I lost my health insurance, which was __ / __/ ____ until the present equals ___ days x $110 per day = $______.
Of course, I will also request attorney’s fees and costs when I decide to institute legal action. I hope we can resolve this matter before initiating legal action.
Sincerely,
Your Name
CC Your Former Employer
Your Former Employer Address
* Read our legal disclaimer! Get everything approved by your lawyer before sending this document. We are providing you with info, not specific legal advice.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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