Ex-Wife of Business Owner Only Entitled to COBRA After Termination

September 12, 2006 (PLANSPONSOR.com) - The US District Court for the Eastern District of Louisiana has determined that the qualifying event commencing COBRA coverage rights for the ex-wife of a business owner was her termination of employment and not her divorce.

In granting summary judgment for the plaintiffs, the court noted in its opinion that Sherry Kern was not in danger of losing her health benefits when she and her husband, owner of Blaine Kern Artists, Inc., divorced. Kern’s employment ended six months following her divorce with her husband.

Considering evidence that Kern was covered under the company’s health plan as an employee and not as the spouse of the business owner, the court determined she was entitled to 18 months of COBRA coverage from her date of termination and not 36 months of coverage from her date of divorce, as she claimed.

Kern had sued her ex-husband’s company, and former employer, and Coventry Health Care of Louisiana as plan administrator, saying her divorce was the qualifying event entitling her to 36 months of continued health care coverage under COBRA. She claimed she was not provided proper notification of her rights to COBRA coverage after her termination from employment and that all her medical claims were not paid by Coventry during the 18 months she was provided COBRA coverage.

While agreeing with Blaine Kern Artists and Coventry regarding the qualifying event, the court decided Kern’s claims regarding notification and payment of benefits were issues for trial.

The case is Kern v. Blaine Kern Artists, Inc. et al.