Health Care Administrator Falls Short of "Good Faith Effort" in Delivering COBRA Notice

August 11, 2006 ( - The 8th Circuit Court of Appeals ruled that a health care administrator failed to make a "good faith effort" to notify a former worker of her COBRA rights when she was terminated.

Kelly Crotty, a former retail worker at Big D Oil Company, filed a suit against her company’s health care administrator, Dakotacare Administrative Services, claiming it failed to give her the notice required by COBRA to allow terminated employees know they have the option of continuing there benefits for a certain period after termination. The store where Crotty worked had closed.

She contended that she lost out on benefits because she was not notified of her rights until the period when she was allowed to exercise those rights had expired.

The appeals court reversed an opinion by a district court that ruled in favor of the administrator, saying it handed over enough evidence that it had complied with COBRA requirements.

The appeals court case also hinged on whether the administrator could deliver enough evidence to prove it complied with the COBRA’s notice requirements.

Even though Dakotacare presented an audit report that showed a letter to Crotty was printed, as well as testimony about the company’s procedure for generating and mailing the letters, the court was not persuaded and ruled the administrator could not prove the system was followed all the way through in Crotty’s particular case.

“Dakotacare has presented evidence that it had a system for sending out COBRA notice,” the opinion said. “The only evidence that it can muster to show the system was followed, however, is an audit report, indicating that at some point Dakotacare’s computer system generated a notice letter for Ms. Crotty.”

The complete opinion is  here .