Plan Administrator’s Business Practices Testimony Prevails In COBRA Case

Defendant argues that it met its obligation to provide notice under COBRA because [it] . . .  placed in the mail to Brooks a letter explaining that he was eligible to continue his health and dental insurance coverage under COBRA (the “COBRA Notice Letter”). . . . Plaintiff makes no argument that the COBRA Notice Letter was in any way deficient for notice under COBRA. Plaintiff argues simply that Defendant has not presented sufficient evidence that the COBRA Notice Letter was actually mailed to him.

Brooks v. AAA Cooper Transp., 2011 U.S. Dist. LEXIS 28218 (S.D. Tex. Mar. 18, 2011)

The result in Brooks v. AAA Cooper Transp. is typical of cases of its kind.  The opinion contains a concise presentation of a defense to a claim that the plan administrator failed to send a COBRA notice upon termination of employment.

The Consolidated Omnibus Budget Reconciliation Act (”COBRA”) requires sponsors of group health plans to provide plan participants who lose coverage because of a “qualifying event” with the opportunity to choose to continue health care coverage on an individual basis. See 29 U.S.C. §§ 1162, 1163.

Termination of employment is a qualifying event pursuant to § 1163(2).  Thus, upon termination of a covered employee’s employment,the plan sponsor must provide written notice to the plan participant within 14 days of the date the plan was notified of the qualifying event.

In the case at bar, the parties agreed that the plaintiff’s termination of employment constituted a qualifying event.  The dispute arose over whether the defendant provided the plaintiff with the statutorily required notice.

The plaintiff contended that he did not receive the notice.  The defendant presented a letter it contended was mailed to the plaintiff.  Testimonial evidence showed the following facts:

In his deposition, the plaintiff agreed that the letter was addressed to him at his correct address, but maintained that he had not received the letter.  On the other hand, the plaintiff had no proof (and it is hard to conceive of what proof could be offered) that the defendant did not mail the notice.

The defendant offered the testimony of an employee in its benefits department.  She testified that she “personally” placed the letter in the outgoing mail. The defendant’s case is aptly summarized in the following excerpt:

Defendant argues that it met its obligation to provide notice under COBRA because on or about February 20, 2008, Courtney Deese Vickers (”Vickers”), a Benefits Specialist at ACT’s corporate headquarters, placed in the mail to Brooks a letter explaining that he was eligible to continue his health and dental insurance coverage under COBRA (the “COBRA Notice Letter”).  Vickers declares that she “personally placed this letter in [ACT’s] outgoing mail,” and attaches a signed copy of the COBRA Notice Letter, dated February 20, 2008, to her declaration.

Plaintiff makes no argument that the COBRA Notice Letter was in any way deficient for notice under COBRA.  Plaintiff argues simply that Defendant has not presented sufficient evidence that the COBRA Notice Letter was actually mailed to him.

From the foregoing comment, it is obvious that the court was not impressed with the plaintiff’s case.  At the same time, it is difficult to see what more the plaintiff could argue if the facts were as he testified.

The court holds for the Defendant, and grants summary judgment, stating:

Vickers’s evidence that she placed the COBRA Notice Letter in ACT’s “outgoing mail” on February 20, 2008, and that the letter was not ever returned as undeliverable, is sufficient to meet Defendant’s summary judgment burden. Plaintiff has provided no contrary evidence. He has no evidence suggesting that the COBRA Notice Letter was processed incorrectly, nor showing any deficiency in Defendant’s mailing system.  Plaintiff has not raised a genuine issue of material fact. As such, Defendant is entitled to summary judgment on Plaintiff’s COBRA claim.

Note: The general rule applicable to COBRA notices is as follows:

An employer has a duty to report most qualifying events, including the termination of employment, to its group health plan administrator within 30 days of the qualifying event. The plan administrator must then inform the qualified beneficiary of his rights within 14 days of being notified of the qualifying event by the employer. 29 U.S.C. § 1166(c). When an employer is also the administrator of the health plan, the employer must give detailed written notice of the availability of COBRA benefits within 44 days after the date of the qualifying event, which includes termination other than for gross misconduct. See 29 C.F.R. § 2590.606-4(b).

The more specific rule governing the facts of cases such as this one is stated in this excerpt:

Defendant relies on Degruise v. Sprint Corp., 279 F.3d 333, 336-37 (5th Cir. 2002), which stated that “employers are required to operate in good faith compliance with a reasonable interpretation of what adequate notice entails.” 279 F.3d 333, 336 (5th Cir. 2002) (internal quotation marks omitted). The Fifth Circuit further explained that employers were not “required to ensure that plan participant actually received notice.” Rather, employers are merely obligated “to use means reasonably calculated to reach plan participants.” Id.