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WCA Management’s $210,000 COBRA Settlement Clears First Hurdle

May 4, 2021, 2:30 PM

A $210,000 class settlement between WCA Management Co. and former employees who challenged the waste collection company’s health coverage notices cleared an early legal hurdle when a federal magistrate judge in Florida recommended the deal be approved.

The settlement is expected to provide a net payment of nearly $69 to each of about 1,771 participants and beneficiaries in WCA’s health plan who received COBRA notices of their right to continue health coverage but didn’t elect to stay covered. Magistrate Judge Leslie R. Hoffman of the U.S. District Court for the Middle District of Florida on Monday concluded that the deal was reasonable, saying that other courts have approved COBRA settlements in “similar, and even lower amounts.”

WCA is accused of violating the Consolidated Omnibus Budget Reconciliation Act, the federal law requiring companies with 20 or more employees to allow workers to continue their health coverage after they’ve been terminated. The statute requires employers to notify workers of their COBRA rights and dictates what information must be included in the notices and when they must be sent. Employers that violate these requirements may face penalties of up to $110 per day for each affected individual.

Plaintiff Ulysses Holmes says WCA’s COBRA notices were legally deficient because they failed to include a termination date for COBRA coverage or name the administrator of the relevant health plan, along with other required information.

Holmes’s lawsuit is one of more than two dozen proposed class actions alleging COBRA notice failures that were filed in 2020. Several cases have been resolved through voluntary dismissals or individual settlements. Enhanced Recovery Co. recently announced a $140,000 class settlement in a COBRA notice challenge, and senior living community manager Goodman Group Inc. agreed to a $112,400 class deal.

The case is pending before Judge Paul G. Byron, who can accept, reject, or modify Hoffman’s report.

Holmes is represented by Wenzel Fenton Cabassa PA, which stands to receive a fee award of one-third the settlement amount if the deal is approved. Hoffman noted in her report that there’s “no guarantee” the firm will receive the full one-third fee award authorized by the settlement.

Littler Mendelson PC represents WCA.

The case is Holmes v. WCA Mgmt. Co., 2021 BL 163959, M.D. Fla., No. 6:20-cv-00698, magistrate report 5/3/21.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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