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Court Dismisses Class Action COBRA Claims of Former Employee Who Still Had Coverage



Carter v. Sw. Airlines Co. Bd. of Tr., 2020 WL 7334504 (M.D. Fla. 2020)

A terminated employee brought a proposed class action lawsuit against her former employer’s board of trustees (in its capacity as plan administrator of the employer’s health plan), alleging that it sent her a late COBRA election notice that lacked essential information and confused her. The board provided evidence that it had sent an election notice six days after her termination, but the employee denied receiving it. More importantly, the board explained that the employee had challenged her termination through her labor union’s grievance process, which allowed her to maintain health coverage while the grievance process was pending. Accordingly, the board had sent the employee a letter 15 days after her termination, advising her that her health coverage would continue and that she was not required at that time to elect COBRA. The letter was designated as an amendment to the COBRA notice and election form that had already been sent. Following the rejection of the employee’s grievance, the board terminated her health coverage and sent a second COBRA notice one day later, which the employee acknowledged receiving. Nevertheless, the employee sued, arguing that the second notice was late (based on her original termination date) and that its content was insufficient, causing her to incur significant medical bills and forgo needed medical care.

The court dismissed the case, ruling that the employee was not due a COBRA election notice until her health coverage terminated following the grievance process. Furthermore, the court concluded that even if she had been entitled to the first notice, the board had presented sufficient evidence that it had been timely sent in a manner reasonably calculated to be received. The court also rejected the employee’s claims of financial harm and forgone medical care, observing that the employee made it appear as though she lost health care benefits immediately after termination and asking, “Why would [the employee] refrain from seeking medical care during a period when she already had health care coverage?” Examining the employee’s claims that the content of the notice was insufficient, the court also ruled that the allegations of a “confusing” notice were conclusory and without evidence, and held that none of the alleged deficiencies rose to the level of a COBRA violation.

EBIA Comment: This case illustrates the fundamental COBRA principle that a qualifying event occurs only when there is both a triggering event (such as termination of employment) and a loss of health plan coverage. Here, the employee did not have a leg to stand on because she still had coverage during the relevant period. Perhaps because of the employee’s clearly lacking legal argument, the court gave the board a pass on several alleged deficiencies in its COBRA notice (specifically, the alleged omission of the date of the qualifying event, the name of the plan, and the plan administrator’s contact information). Other courts considering class action COBRA lawsuits have not been so quick to dismiss similar allegations (see, for example, our Checkpoint article). For more information, see EBIA’s COBRA manual at Sections VII.K (“Triggering Event Must Cause Loss of Coverage”) and XVIII.D (“What Information Must the Election Notice Contain?”).

Contributing Editors: EBIA Staff.

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