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Benefits

Absent Proof That COBRA Notice Was Actually Mailed, Court Rejects General Evidence Regarding Mailing Procedures

EBIA  

EBIA  

Randolph v. E. Baton Rouge Parish Sch. Bd., 2019 WL 6255489 (M.D. La. 2019)

A former employee claimed she did not receive timely notice of her COBRA rights upon employment termination and that she was unaware her health coverage had lapsed for almost a year. After contacting her employer, the employee allegedly declined COBRA coverage because she could not afford a lump-sum retroactive payment and her request for installment payments was denied. The employer asserted that upon terminations, resignations, or retirements, COBRA notifications were automatically generated and mailed to employees, and there was “no reason to believe that the ordinary process would not have been completed” for this employee. The employer further argued that even if it had not provided the notice, the employee could not prove damages because she had declined COBRA coverage. The employer asked the court to rule in its favor without a trial.

Citing Fifth Circuit precedent (see our Checkpoint article), the court concluded that the employer’s declaration regarding general business practices was insufficient to demonstrate it had met its notice obligations, specifically because the employer could not produce a copy of the letter or any documentation to back up its assertions that the notice had been mailed. Accordingly, the employer’s motion was denied, and the case was set for trial.

EBIA Comment: In a lawsuit for failure to offer COBRA coverage, the plan administrator (typically the employer) bears the burden of proving the election notice was properly sent. Proof of receipt is not required—demonstrating that the notice was sent by means reasonably calculated to reach the recipient is sufficient. While the best evidence may be a certificate of mailing or a certified mail receipt, many larger employers instead rely on comprehensive business records. Lawsuits often turn on the plan administrator’s ability to produce written COBRA notice procedures and business records to prove the procedures have been consistently followed. Courts frequently cite the adequacy—or inadequacy—of such documentation as a factor in their rulings (see, for example, our Checkpoint articles on rulings from the Sixth and Eleventh Circuits). It is imperative for employers to retain records sufficient to prove that adequate notice has been timely provided to each qualified beneficiary. For more information, see EBIA’s COBRA manual at Section XVIII.J (“Sending the Election Notice and Proving It Was Sent”). You may also be interested in our webinar “Learning the Ropes: An Introduction to COBRA Continuation Coverage” (recorded on 7/31/19).

Contributing Editors: EBIA Staff.