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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104





July 25, 2013 

 State and Federal Law Alert


Employer's COBRA Failures Result in $1.85 Million Penalty


A federal court has held a large employer liable for $1.85 million in penalties due to its failure to distribute COBRA election notices on a timely basis. In Pierce v. Visteon Corp., the court found that the employer had breached its duty to comply with COBRA's notice requirements and that using a third-party COBRA administrator did not shield the employer from liability.


The employer was the plan administrator for its group health plan and used a third-party administrator ("TPA") to administer COBRA. The employer did not regularly conduct audits of the TPA's administrative system, or its performance, to ensure that participants were being properly notified of their COBRA election rights. In addition, the employer did not receive reports or confirmations regarding COBRA notifications.


Due to various flaws in the TPA's administrative system, over the course of several years numerous former employees failed to receive timely COBRA notices. In fact, some qualified beneficiaries' notices were over 400 days late, while others did not receive the notice at all.


Two former employees who never received COBRA notices filed a class action lawsuit. In response, the employer blamed its COBRA TPA and asserted that these failures were out of its control.


The court said that the use of a TPA to administer COBRA did not shield the employer from its COBRA liability. It then said the evidence demonstrated that the employer was either grossly negligent or willfully ignorant of COBRA's notice provisions. The court noted that the employer: (i) did not maintain a written COBRA policy or provide COBRA training to its managers; and (ii) had failed to periodically review the TPA's administration processes. The court concluded that the employer's COBRA notification program was not reasonably designed to ensure compliance with the law.


The court awarded penalties of $2,500 per affected individual, which meant $1.8 million in total penalties. It also determined that an attorneys' fee award was justified due to the employer's lack of due regard for the seriousness of the COBRA violations.


In the wake of Pierce v. Visteon Corp., employers should review their COBRA policies and procedures to ensure they satisfy required deadlines and obligations, regardless of whether they use a COBRA TPA. In addition, employers that use a TPA should monitor their TPA on a regular basis.  


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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.