Court: Divorce Notification Triggers COBRA Rights

November 14, 2006 ( - The date of a notification about a divorce between a health plan beneficiary and her husband triggered the plan's obligation to inform the beneficiary of her continuing coverage rights, a judge has ruled.

US District Judge John Jones III of the US District Court for the Middle District of Pennsylvania decided that even if the couple’s divorce was not finalized until nearly three months after the administrator received notice from the husband, the administrator wasn’t required to clarify whether the divorce was actually final at the time the notice was received.

Jones asserted that the act of an employee telling his or her employer that a qualifying event has occurred and not its actual occurrence triggers requirements that employers provide notice under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

According to the decision, Nichole Hall sued plan administrator, Capital Administrative Services Inc., and her ex-husband’s employer, Glenn O. Hawbaker Inc., asking the court to acknowledge that her COBRA rights didn’t start in June 2005 when her ex-husband represented to the plan the couple’s divorce had been finalized, but in September 2005 instead when the divorce was actually effective. Nichole Hall further insisted that Hawbaker was required to give her 60 days after the September 9, 2005 date to elect COBRA coverage and pay all COBRA premiums.

A week after the plan administrator got the ex-husband’s termination notification form, it sent a notice to Nichole Hall of her right to elect continued health insurance benefits under COBRA. Nichole Hall alleged that she elected to receive COBRA coverage and paid her premiums on time but that Capital eventually terminated her coverage for late payment of premiums.

The court went on to say that it would not dismiss Nichole’s claim that her COBRA should be reinstated because an issue of disputed fact remained as to whether the premium payments made by Nichole Hall had actually been made on time.

The case is Hall v. Glenn O. Hawbaker Inc., M.D. Pa., No. 4:06-CV-1101, 11/8/06.