Compliance August 6, 2004

Court: Employee's COBRA Premiums Higher than Medical Bills

August 6, 2004 (PLANSPONSOR.com) - A federal judge has thrown out a terminated employee's lawsuit against his former employer over continuing health-care coverage notice problems, ruling the worker was better off without the coverage.
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An EBIA report said that the plaintiff had argued that the employer had failed to provide him the required notice under the Consolidated Omnibus Budget Reconciliation Act (COBRA), but could only produce one medical bill for $258 incurred after his termination.

The employer admitted that it had not sent the employee a COBRA notice but stated that it believed that a letter from its health care provider that was sent to the former employee several months after his termination satisfied the COBRA notice requirements.

The judge in the US District Court for the Southern District of New York found that the plaintiff would have had to pay COBRA premiums much more expensive than the one bill. The judge also noted that the employer had offered the plaintiff COBRA coverage when the suit was filed, but that the offer was declined.

Ruling that “where [the employee] is in a better position not having exercised his rights under COBRA, there can be no actual damages,” the court ruled for the employer.

The case is Soliman v. Shark Inc., 2004 U.S. Dist. LEXIS 14254 (S.D.N.Y. 2004)].

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