District Court Allows COBRA Notice Case to Continue
March 25, 2025
On February 4, 2025, a federal court in the Middle District of Florida Tampa Division denied a defendant’s motion to dismiss a case alleging that the defendant issued a deficient COBRA election notice.
The plaintiff is a former employee of the defendant's employer, which sponsors and administers the health plan the plaintiff participated in. The defendant terminated the plaintiff’s employment, but not for gross misconduct. The defendant is subject to federal COBRA, and the plaintiff’s termination was a qualifying event, so the defendant was obliged to send the plaintiff a COBRA election notice.
The plaintiff alleges that the election notice was deficient in ways that caused her to decline continuing coverage, which she and her family ended up needing to handle several medical issues. The plaintiff alleges that the notice failed to provide the specific “date by which the election must be made.” The plaintiff also alleges that the notice gave her 60 days from her last day as an employee rather than 60 days from the date of the notice to make an election, as regulations require. Additionally, the notice did not tell her who would be covered through COBRA, what she would have to pay for the continuation coverage, and when she had to make payments. Overall, the notice was not written in a way that an average participant would understand. For these reasons, the plaintiff declined the continued coverage. During the time she would have been covered, she and her family incurred medical expenses.
The defendant argued that the plaintiff did not establish the facts needed to show that she suffered an injury that can be traceable to the allegedly deficient notice and that she failed to show that the allegedly deficient notice was the cause of her failure to elect COBRA. However, the court concluded that the plaintiff did enough to establish her claims at this stage of the litigation. The defendant also claimed that they attempted in good faith to comply with COBRA election notice requirements, which is enough to dismiss the case. Although this had been a valid defense in the past, the court noted that regulations no longer allowed it. For these reasons, the court allowed the case to continue.
Employer Takeaway
This case serves as a reminder that it is important to make sure that COBRA notices conform to regulations. Many employers engage vendors to administer continuation coverage for them. However, since employers are ultimately responsible for ensuring COBRA is properly administered, they should confirm with those vendors that the COBRA notices reflect all required content in a clear and understandable manner.
Marrow. v. E.R. Carpenter Co., Inc.