A former public-school employee sued the employer following his involuntary termination of employment. The majority of the employee’s claims were brought under Section 1983, a federal law that allows individuals to sue state and local government officials for violations of their constitutional rights. But he also filed a claim for intentional infliction of emotional distress in connection with the termination of his coverage under the employer’s group health plan. The employee was terminated on April 30, 2020, and the employer testified that it sent COBRA information in May, although the employee denied receiving it. In addition, for reasons unknown, the plan’s insurer terminated the employee’s coverage effective April 1, 2020—prior to his termination date—causing a lapse in coverage during the height of the COVID-19 pandemic.
The court explained that a claim of intentional infliction of emotional distress requires evidence of intentional, outrageous conduct that goes “beyond all possible bounds of decency” and is “utterly intolerable in civilized society.” Under this standard, the court found that the employer’s conduct was not outrageous, noting that the employer (1) notified the employee of his termination, and that COBRA information would be forthcoming, (2) did not instruct the insurer to terminate the employee’s coverage early, and (3) testified that standard procedures were followed in connection with the employee’s termination, including the provision of COBRA election information. The court concluded that, at most, the employer was not diligent in ensuring the employee was able to maintain his health coverage under COBRA. Finding that the “[f]ailure to follow-up on health insurance paperwork, even during a global pandemic” was not outrageous, atrocious, or utterly intolerable, the court dismissed the claim.
EBIA Comment: Courts have repeatedly held that damages for COBRA violations are generally limited to unreimbursed medical expenses less applicable premiums and deductibles. Neither COBRA nor ERISA (of which COBRA is a part) provides for extra-contractual or consequential damages such as recovery for emotional distress. The employee may have met with more success if he had focused instead on the employer’s alleged notice failure, the insurer’s inexplicable coverage termination, and the unreimbursed medical expenses he incurred due to the lapse in coverage. For more information, see EBIA’s COBRA manual at Sections XXV.E (“Suits for COBRA Coverage Under ERISA”) and XXV.F (“’Other Relief’ Under COBRA: Possibility of Damages Beyond Penalties and COBRA Coverage”).
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