Evidence of Employer's Mailing Procedures Does Not Prove COBRA Compliance

The United States District Court for the Middle District of Louisiana, in Randolph v. Baton Rouge Parish Sch. Bd., has ruled that an employer's declaration about its general business practices was insufficient to demonstrate it had met its obligations to timely notify a terminated employee about her continuation rights under COBRA. In particular, the court held that an employer must provide evidence that a COBRA election notice was actually mailed to the former employee to prove good faith compliance with the law's notice requirements.

Law. Employers must generally provide COBRA election notices to former employees and other qualified beneficiaries within 44 days of a qualifying event. (COBRA qualifying events include loss of coverage due to: termination of employment; reduction in hours; death of the employee; divorce or separation from the employee; the employee's becoming covered by Medicare; and ceasing to be a dependent child under the plan's terms.) Failure to provide the COBRA election notice within this time period can subject employers to a penalty of up to $110 per day, at the discretion of the court, as well as the cost of medical expenses incurred by the qualified beneficiary.

Background.  In Randolph, following a parent complaint, the employer terminated the plaintiff from her position as interim principal and reassigned her to work as a teacher at another school. The plaintiff never reported to work and instead responded by submitting a "Notice of Resignation: Due to Retirement."

Following her termination, the plaintiff went to a doctor's appointment and learned that her health insurance had been cancelled. After calling the employer to discuss the issue, the plaintiff was offered COBRA coverage for the first time, which she declined, because she could not afford a lump-sum retroactive payment and her request for an installment payment plan was denied. The plaintiff subsequently received a cancellation notice from the insurer, but before her call with the former employer, she "hadn't received a COBRA notice or anything."

District Court.  The plaintiff sued the former employer in federal court claiming, among other things, that it had violated COBRA by failing to timely provide notice of her continuation of insurance coverage rights. The plaintiff maintained she was unaware of any lapse in her health insurance coverage until her doctor's appointment where she was advised that her health insurance had been cancelled. The plaintiff's evidence of this fact was solely her deposition testimony, and she had argued that the former employer had provided no evidence to prove otherwise.

Conversely, the former employer argued that there is no evidence that it failed to provide the plaintiff with adequate notice of her COBRA continuation rights. The former employer had maintained that, upon termination, resignation or other retirement, benefit notifications, including COBRA notifications, were automatically generated and mailed to an employee. As evidence of this fact, the former employer's Supervisor of Payroll and Benefits provided a declaration under oath that "there is no reason to believe that the ordinary process would not have been completed [for the plaintiff]."

The district court concluded that the employer's declaration regarding its general practices for mailing COBRA notices was insufficient to demonstrate (at this point of the trial) that it had met its COBRA notice obligations. The district court noted that the employer had not submitted a copy of the letter it had allegedly mailed to the plaintiff nor any evidence that the purported COBRA notice sent to the plaintiff complied with the applicable legal requirements.

Accordingly, the district court denied the employer's request to dismiss the plaintiff's COBRA claims and the case was set for trial.