QDRO Cannot Override ERISA Rules for COBRA and
Retirement Benefits
October 2, 2009 (PLANSPONSOR.com) - The U.S.
District Court for the Eastern District of Pennsylvania has
ruled that the former spouse of an employee cannot get
continued health care benefits as dictated by a qualified
domestic relations order (QDRO) because the plan was not
notified of her divorce within the 60-day notice requirement
for a qualifying event under the Consolidated Omnibus Budget
Reconciliation Act (COBRA).
Granting summary judgment to the Carpenters Health &
Welfare Fund of Philadelphia & Vicinity, the court
pointed out that the Employee Retirement Income Security
Act (ERISA) obligates the employee or the former spouse to
notify the Welfare Fund "administrator of the
occurrence of [the divorce] within 60 days after the
qualifying event." The divorce was final on November
6, 2006, and the plan received written notice of the
divorce in June 2007.
The court rejected Doreen Ludwig's argument that the
fund knew she and her husband were going through a divorce
from requests made by attorneys during the divorce
proceedings, making notification of the final divorce
unnecessary, saying a "pending divorce" is not a
qualifying event within the ambit of the plan or COBRA. The
court also determined that a union member's oral
statement that Ludwig would receive COBRA benefits did not
obligate the plan to provide benefits.
In addition, the court agreed with the defendants that
Ludwig was not entitled to a lump sum of retirement plan
benefits granted to her by the QDRO. The court said that
because ERISA provides that a QDRO cannot require increased
benefits or a type or form of benefit not otherwise
provided by the plan, under plan terms Ludwig will be
eligible for a distribution of benefits when her ex-husband
dies, retires, is separated from contributory service for
twenty-four months, or reaches age fifty.
The court's opinion is
here
.
Rebecca Moore
editors@plansponsor.com