In a recent Puerto Rico court case, Rivera v. Union de Tronquistas de Puerto Rico Local 901, an employee sued for failing to receive a COBRA notice.
COBRA requires notice to qualified beneficiaries upon the occurrence of loss of health coverage due to a COBRA qualifying event. The employer must notify the plan administrator (if a separate entity) of the qualifying event within 30 days of the event. The plan administrator must notify the qualified beneficiaries of their right to continue coverage under COBRA within 14 days of notice from the employer. If the employer and plan administrator are the same entity, the employer has 44 days from the date of the event to notify qualified beneficiaries of their right to continue coverage under COBRA. Failing to meet the timing requirements can lead to fines of up to $110 per day.
In the case for summary judgment, the court did not simply follow the statutory rules. Instead, it looked to see if the plaintiff was harmed from not receiving a COBRA notice. The plaintiff argued that he was harmed because he lacked access to medical care and he and his spouse did not seek necessary care because of the lack of coverage.
The company agreed that it did not send notice, but argued that there was no evidence that its mistake was intentional. The court dismissed the case and did not impose penalties on the employer.
This case, which is very pro-employer, is not typical of how courts address COBRA mistakes. However, it does remind employers to review their COBRA processes to make sure policies and procedures are in place for timely sending COBRA notices.