A recent case shows how an employer defeated a former employee’s COBRA claim by providing accurate records of when and how its COBRA election notices were sent. Perkins v. Rock-Tenn Services, Inc. (6th Cir. 2017).
The Consolidated Omnibus Budget Reconciliation Act, also known as “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 at their own cost for a limited period of time. Under COBRA, employers are required to notify employees of their rights to continue health insurance when qualifying events occur.
Ms. Perkins claimed that she did not receive the required COBRA notice to elect continuation coverage after she resigned. At trial, the employer provided evidence showing its third-party vendor sent the COBRA election notice on its behalf. While the third-party vendor did not maintain physical copies of sent notices, it was able to provide screenshots from its computer database indicating that the notice had been sent to Perkins not just once, but twice. The court ruled that this evidence was sufficient to show that the COBRA election notice was sent.
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. And, as this case show, the key to showing compliance is good recordkeeping.