A recent court case shows how an employer defeated a former employee’s COBRA claim by keeping accurate records of when and how its COBRA election notices were sent. Somers v. Cudd Energy Services, Inc. (W.D. Okla. 2012).
COBRA is the federal law that allows health plan participants who lose coverage due to certain “qualifying events,” such as termination of employment, to continue health plan coverage on a self-pay basis for a limited period of time. As the plan administrator of your group health plan, you have the obligation to provide a COBRA election notice to a plan participant that experiences a qualifying event.
In Somers, the former employee claimed that she did not receive her COBRA election notice. At trial, the employer provided evidence that it sent the letter to the employee at her last known address. Its evidence included actual dated copies of the election notice that was provided to the employee, addressed to her at her last known address, and a copy of an audit report showing the date that the letter was mailed to the employee. Dismissing the employee’s claim, the court ruled that the employer’s only obligation under COBRA was to show that the election notice was sent (which it did with the evidence provided), not to prove that the employee actually received it.
Whether you administer COBRA in-house or contract with a third party administrator, the burden is on you, the employer, to be able to show that you are in compliance. The key to proving compliance is keeping good records. Especially in the case of the COBRA election notice, you should be keeping records that prove that the notices were provided. This means keeping copies of the completed, dated and addressed notices, as well as proof of the method used to send them.