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John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 5733
Experience:  Exclusively practice labor and employment law.
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while I was employed at my previous employer I lost my old

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while I was employed at my previous employer I lost my old insurance coverage and had to apply for the company insurance. After summiting the application I waited for almost two months with no notice. Talked to H.R. and they hadn't summited it. So another month goes by and I asked again and they said they were a little late in summiting the application and they were trying to get it resolved. Well shortly there after I occurred some medical bills and days after that was terminated. Because they had never secured my insurance policy like they should have my medical bills were never paid now affecting my credit while trying to start a new business. As well as I was never offered cobra. I was just wondering what are the different complaints I could file and what are the penalties
Hi, thanks for submitting your question today and I'm sorry to hear about your employment and healthcare matters. The issue you are having is covered under the Employee Retirement Income Security Act (ERISA). Specifically, under ERISA, plan participants are defined by every employer health care plan, and whenever an employee meets the definition of a participant under such a plan, he or she must be covered or it is a violation of ERISA. It is a violation by the employer to have failed to have enrolled you and you are able to have your medical costs and attorney fees reimbursed by the employer for failing to enroll you. Likewise your COBRA rights are a part of ERISA and the COBRA action should be addressed in the same lawsuit. But, unless the employer is going to willingly reimburse these costs, you'll have to file a lawsuit for the same.

Unfortunately, because ERISA is such a complicated law, most individuals are not capable of brining a claim in federal court, which is required. So you will most likely need to get an attorney to represent you. So I would highly recommend you to get an attorney in your area that specializes in benefits claims and ERISA law. Most lawyers will take such a claim because it awards them attorney fees.
Customer: replied 4 years ago.

Thank you that information it's very helpful. My only question remaining is. Do you know what the penalties are for a ERISA violation that relates to my situation? Like for instants with the cobra violation it is $150.00 a day for the provider and 100.00 a day for each dependent after the 90 day allowance.

For failure to provide benefits the only punitive damage you can get is attorney fees; in addition to your unpaid medical expenses. There are no other punitive damages in a claim for benefits.

Hope this helps. Thanks
Customer: replied 4 years ago.

So is the understanding that I have for punitive damages for cobra correct?

Not to my knowledge. There are two different types of COBRA non-compliance penalties: the DOL assesses "ERISA statutory penalties," and IRS levels "excise taxes."The Department of Labor can penalize an employer up to $110 per day per beneficiary for non-compliance. The IRS is authorized by TAMRA (Technical and Miscellaneous Revenue Act of 1988) to assess COBRA excise taxes for failure to follow COBRA rules. The minimum tax levied by the IRS for non-compliance discovered after a notice of examination is generally $2,500. Penalties can be up to $2,500 for each beneficiary affected by non compliance, or the total amount based on the number or days of noncompliance, whichever is less. If the IRS finds a violation that it considers to be more than minimal, employers may be subject to a penalty up to $15,000. The maximum any employer could be taxed in a given year is ten percent of the health plan costs in the previous year or $500,000, whichever is less. The IRS will not assess a tax only if the COBRA violation proves to be inadvertent or negligent and the employer corrects the violation within a 30 day grace period of discovering the violation. There is no 30-day grace period if the IRS concludes that the violation was willful. IRS agents can reduce or waive excise taxes based on their perception of inadvertent or willful noncompliance.

But neither of these penalties are payable to the plan participant. Participants can sue for legal fees and medical costs only.
Customer: replied 4 years ago.

My last question then would be how would it benefit a person to add a cobra violation to their claim and take on that legal battle if the IRS is the only entity to stand to gain from such claim

because there are 18 months after termination of employment that would have been covered by the employer's health insurance had the participant had access to the plan. If the employer fails to give notice the employee claim benefits costs retroactive to the date of termination.
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