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Court Dismisses COBRA Claim Brought Three Years After Employment Termination



Schwartz v. ADP, Inc., 2021 WL 3172029 (M.D. Fla. 2021)

As part of a larger employment action involving allegations of wrongful termination, wiretapping, and unfair trade practices, a former employee sued his employer for not providing a COBRA election notice when he was terminated. The employee alleged that without the notice, he was unable to make an informed decision on health insurance coverage, which caused him to lose coverage and to postpone having a baby. The employer moved to dismiss the COBRA claim, arguing that, after almost three years, the former employee was no longer a plan participant eligible to bring a suit under ERISA.

The court agreed, citing the employee’s delay in filing suit. Because the 18-month period of COBRA coverage to which the employee would have been entitled had expired, the court ruled that the employee must be able to identify a “colorable claim to some other current or future vested benefit.” In the absence of such a claim, the court concluded, the employee had no right to sue.

EBIA Comment: Although this employee did not prevail on his COBRA claim, the case is a good reminder of the procedural aspects of COBRA litigation. In addition to determining whether a claim was timely filed, courts will examine such issues as whether the claim was filed under the correct statute, whether the litigant has exhausted the plan’s administrative remedies (if required), and whether the proper parties are named as defendants. Plan administrators facing litigation should obtain legal counsel as early as possible to address these threshold issues, possibly avoiding some of the expenses of prolonged proceedings. For more information, see EBIA’s COBRA manual at Section XXV.H (“Procedural Issues in COBRA Lawsuits Under ERISA”).

Contributing Editors: EBIA Staff.

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