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Benefits

Court Dismisses PHSA COBRA Case Against School Board

EBIA  

EBIA  

Guy v. Bd. Of Educ. Rock Hill Local Sch. Dist., 2021 WL 1140224 (S.D. Ohio 2021)

Available at https://www.govinfo.gov/content/pkg/USCOURTS-ohsd-1_18-cv-00893/pdf/USCOURTS-ohsd-1_18-cv-00893-1.pdf

A former employee sued the school board that had employed her and its two service providers for failing to provide a COBRA election notice upon her termination of employment. The employee claimed that she suffered unspecified damages and asked the court to impose fines, attorney’s fees, and “other relief.” The employer and service providers sought dismissal of the case, arguing that the plan at issue was governed by the Public Health Services Act (PHSA), which does not allow the type of relief the employee was seeking, and that the employee’s complaint contained only unsupported and contradictory allegations. The PHSA’s COBRA provisions apply to group health plans maintained by states or their political subdivisions, agencies, or instrumentalities.

The court agreed with the employer and service providers and dismissed the case. Citing a decision in another case (see our Checkpoint article), the court explained that the PHSA does not authorize fines, attorney’s fees, or compensatory monetary damages as remedies for COBRA notice violations, and claims seeking these damages under the PHSA are subject to dismissal as a matter of law. The court also pointed out the employee’s failure to identify specific damages suffered but noted that, even if she had provided more specific allegations, she would not have been entitled to relief under the PHSA.

EBIA Comment: Qualified beneficiaries of governmental health plans are at a distinct disadvantage in legal challenges involving COBRA violations because the PHSA’s enforcement provisions are much narrower than ERISA’s. While ERISA allows for statutory penalties of up to $110 a day, “other relief” in the form of nonequitable damages (such as monetary damages for the deterioration of health), and recovery of fines and attorney’s fees, the PHSA’s relief provisions are limited to remedies traditionally available at equity such as injunction, mandamus, and equitable restitution. For more information, see EBIA’s COBRA manual at Sections III.B.3 (“PHSA’s COBRA Provisions”) and XXV.K (“Lawsuits Under the PHSA”).

Contributing Editors: EBIA Staff.

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