The COBRA (Consolidated Omnibus Budget Reconciliation Act) gives the right to workers to continue enjoying their healthcare benefits once these are lost due to job termination, hour reductions, and other life events. Employers are required to send notice to eligible former employees to inform them how to elect COBRA benefits. However, McDonald failed to comply with the notice requirements of COBRA as they sent multiple notices in separate documents each with vital COBRA information. According to the plaintiffs, these multiple notices led to confusion among workers. However, they failed to provide an address where the COBRA payments shall be mailed, a physical election form, and identify a plan administrator.
Settlement website – JohnsonVMcDonaldsSettlement.com
Objection deadline – 01/15/2023
Exclusion deadline – 01/15/2023
Claim Form – Class members don’t need to submit any claim form to benefit from the terms of the settlement. They will automatically receive the benefits if class members don’t separately exclude themselves from the settlement. However, they can update their address from the settlement website to ensure receiving their payment.
Deadline for submitting the claim – Not applicable
Final Hearing date – 02/08/2023
Settlement amount – $156K
Potential claim amount – Variable
Proof of purchase – Not applicable
The defendant chose not to use a model form despite having access to the Department of Labor’s Model COBRA form. As per the COBRA class action lawsuit, this was done to save money by preventing the terminated employees from electing COBRA. Workers lost their family’s health and dental insurance due to the misleading confusing notices and this led to financial hardship such as medical bills and other expenses.
Though McDonald’s hasn’t admitted any wrongdoing, they have agreed to resolve these allegations by paying $156,782.50. Under the settlement terms, class members are eligible for an equal share of the settlement fund. However, the actual payments will vary according to the deductions made from the settlement fund and the number of participating class members.
As per the settlement website, payments will range between $7 and $10 after deductions for court expenses, attorneys’ fees, and other expenses. The maximum ceiling of payment is $17.50. For uncashed cheques and funds remaining in the settlement, the incremental fund will be donated to the non-profit legal aid organization Bay Area Legal Services as a cypres recipient on receipt of the court’s approval.