Ala. company fined $83K for not sending COBRA dental coverage notice

An appeals court has upheld an $83,000 fine against a Birmingham, AL, bookstore for failing to send an employee a notice about her Consolidated Omnibus Budget Reconciliation Act (COBRA) dental coverage.

The case, Evans v. Books-A-Million, involved a terminated employee, Tondalaya Evans, who was on the company's group dental plan but failed to receive timely COBRA notice. Evans sued, and the Eleventh Circuit Court of Appeals ruled that the company had intentionally failed to send the notice after Evans refused reassignment after returning to work from maternity leave.

The court applied a $75 per day penalty contained in the COBRA statute, resulting in a fine of $37,950, plus attorneys' fees and costs adding another $45,000 to the verdict, according to a jdsupra.com story.

COBRA requires employers to send qualifying employees notice of their ability to continue group medical, dental, and vision plan coverage at their own expense after separation from employment.