Recordkeeping evidence leads Eleventh Circuit to conclude that former employer met COBRA obligations

A former employer’s motion for summary judgment on a COBRA claim was affirmed by the Eleventh Circuit U.S. Court of Appeals based on its ample evidence of recordkeeping practices. The court added that, even if the former employee never received his COBRA notice, the former employer had met its COBRA obligations.

The Eleventh Circuit’s decision highlights the importance of maintaining meticulous records of COBRA notice practices. The court also affirmed the lower court’s dismissal of the former employee’s Title VII retaliation claim.

Paul DeBene (DeBene) worked for BayCare Purchasing Partners (BayCare) as a Senior Contract manager from 2004 until his termination in July 2014. During his employment, he also worked for two software development firms that provided programs to BayCare, but he failed to notify BayCare of this until June 2014. Upon learning of his other employment, BayCare terminated him for violating its conflict of interest policies.

Election period extended.

Because he had a pacemaker in his chest, DeBene was concerned about maintaining his health insurance, and when he did not receive a COBRA continuation notice, he contacted BayCare’s senior benefits specialist, who erroneously told him that he was ineligible for COBRA because he had been terminated for gross misconduct. When DeBene contacted BayCare’s plan administrator and the Labor Department, stating that he did not receive a COBRA notice, the plan administrator sent him a COBRA election package and extended his election period.

DeBene filed suit in district court, claiming that he never received the COBRA election package, and BayCare responded that its actions constituted compliance with COBRA even if the election package were never received. BayCare had contracted with Benefits Concepts to provide initial COBRA election notices, and BayCare exported its benefits data files, including termination of employment information, directly to Benefits Concepts.

Evidence of standard practices.

Evidence was presented that, once Benefits Concepts received the information, it was loaded into a computer system, and an election notice would be automatically generated and printed. Evidence was further presented that a fulfillment clerk would then place the notice in an envelope and deliver it to the post office to be sent via first-class mail to the last known address of the former employee.

At the summary judgment hearing, evidence was also presented that DeBene was properly coded into BayCare’s database as COBRA eligible, despite the senior benefits specialist’s misstatement to DeBene about his eligibility, and that other recipients of notices mailed the same day successfully elected coverage. There were no other employees reflected in Benefits Concepts’ report for that day who had reported not receiving a notice.

The court pointed out that, under COBRA regulations, sending a notice by first-class mail is sufficient for a plan administrator to meet the requirement to “use measures reasonably calculated to ensure actual receipt of the material by plan participants” (29 C.F.R. §2520.104b-1(b)(1)).

The court determined that no genuine issue of material fact existed with regard to whether or not a COBRA notice was mailed to DeBene. Evidence of routine processes by BayCare and Benefits Concepts regarding the preparation and mailing of COBRA elections notices, and of how those processes were followed, along with a copy of DeBene’s COBRA letter containing his premium amount and enrollment form were highlighted by the court as reasons for its decision. A report from Benefits Concepts showing when the letter was sent and successful election of coverage by other employees who received notices mailed the same day led the court to conclude that BayCare met its obligations under COBRA. The district court’s grant of summary judgment was affirmed.

SOURCE: DeBene v. Baycare Health System, Inc., (CA-11), No. 16-12679, May 31, 2017.
Visit our News Library to read more news stories.