Compliance October 26, 2007

MO Firm Committed COBRA Notice Violation

October 26, 2007 (PLANSPONSOR.COM) - A federal judge in Missouri has ruled that a Missouri manufacturer failed to provide a former employee's wife with the required notice of her access to continuing health care coverage.
Reported by

Even though U.S. District Judge Charles A. Shaw of the of the U.S. District Court for the Eastern District of Missouri found that Good Earth Tools, Inc., of   Crystal City, Missouri breached its responsibility to inform   Margaret E. Finan of her rights under the Consolidated Omnibus Budget Reconciliation Act ( COBRA ), Shaw declined to fine the employer. The court said there was no evidence of the company’s bad faith.

In his ruling, Shaw found that the COBRA notice was not addressed jointly to Finan and husband Thomas, who had worked for the company, and that was no special insert addressed to Margaret Finan advising her of her COBRA rights.

When Thomas Finan was terminated from the company, he was given a COBRA notice about his rights, but the couple claimed in the lawsuit that the notice to the wife was insufficient.

Shaw noted in the ruling that COBRA election rights must be provided to each qualified beneficiary, but admitted that courts had different holdings about how to notify a spouse of an employee whose employment terminates.

The ruling in Finan v. Good Earth Tools, Inc., is here .

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