COBRA Notice

Posted by BAS - 07 April, 2016


Proper COBRA administration was implicated in a wrongful termination lawsuit filed in the Western District of Louisiana.  In Newton v. Prator, the plaintiff, Cory Newton, a former deputy sheriff, sued Steve Prator, the sheriff, alleging that his rights were violated when he was fired for refusing to sign a reprimand. 

In the case, Newton claims that he did not receive notice that he was eligible to continue group health coverage under COBRA.  As a result, he incurred large medical expenses that were not reimbursed by insurance. 

Three days after Mr. Newton’s termination, his employer notified their third party COBRA administrator of Mr. Newton’s address.  Court records showed that the address was an old address that Mr. Newton had not occupied since 2010.  Mr. Newton presented support that he had advised his employer of his change of address at the time it was made, and he received communications from his employer (including mailings from his health insurance provider and a W-4 withholding certificate) at his updated address before the termination.

The employer argued that COBRA requires an employer to send notice to the employee’s last known address, and not ensure receipt of the COBRA notice.  The court agreed that an employer does not have to confirm actual delivery of the notice, but an employer does not act in good faith if it sends a COBRA notice to an address at which it knows the former employee no longer lives. 

Since there was enough evidence to dispute the COBRA notice delivery, the case could proceed to trial.

The outcome of the trial on the COBRA matter will be interesting for employers.  Regardless, all employers should keep their records up to date and make sure to communicate recent information to outside vendors.

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