Court OKs COBRA Notice Timing

October 22, 2004 (PLANSPONSOR.com) - A federal judge has dismissed a lawsuit by a woman who charged her employer didn't properly inform her of her continuing health care coverage rights.

>EBIA reported that the employer notified the plaintiff of her right to buy continuing health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) just before her formal termination date for employment and plan coverage purposes. However, because of an internal company error, the employer had also notified her that her coverage would end a few days after her termination several months before.

>The employee’s coverage was later retroactively reinstated (pursuant to the terms of the plan) when she received a disability determination from the Social Security Administration. The plaintiff filed the suit claiming that the employer had violated the COBRA requirements. She admitted having received a COBRA election notice from the employer but apparently claimed that the notice should have been provided at the time that the employer first notified her that her coverage would end.

>In this decision, the judge ruled that the employer had provided a COBRA election notice within the period required by the statute. The court found that the applicable statutory deadline for providing the election notice was 44 days from the date of the COBRA qualifying event – because the same entity was both the employer and the plan administrator – and that the qualifying event occurred on the employee’s official termination date.

>The court further ruled that no ERISA statutory penalties should be assessed in any event because the employee had been retroactively reinstated in the employer’s plan and had suffered no loss of benefits. Also, there was no evidence that the employer had acted in bad faith, the court said.

>The case is Gonzalez Villanueva v. Warner Lambert, 2004 U.S. Dist. LEXIS 20359 (D.P.R. 2004).

«