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Distribution of COBRA Notice Requires Proof

A recent case from a Louisiana district court emphasizes the importance of keeping records of required COBRA notices. In the case, a former employee claimed she never received a notice of her right to elect COBRA coverage after she was terminated from employment, and further was unaware that her health coverage was canceled upon her termination. Once she realized she was no longer covered under the health plan, she contacted her employer. The employer offered to allow her to elect COBRA retroactively, but she would have to pay all the monthly premiums in a lump sum. The former employee declined COBRA coverage, as paying this lump sum was not financially feasible. The former employee later sued.

In court, the employer stated that all COBRA notifications are automatically generated and mailed to former employees, and the employer had no reason to believe the system did not auto generate and mail the required notice in this instance. However, the employer did not have any proof of this specific notice to this former employee. The court held that proof of the employer’s general business practices was not sufficient to prove it complied with COBRA’s notice requirements. The employer instead needed to provide further proof that the specific notice was sent, such as a copy of that notice.

This case serves as a reminder that the health plan administrator bears the burden of proving COBRA notices were distributed as required. While courts vary in what evidence they consider sufficient to prove proper distribution, plan administrators should retain as robust of records as is financially and administratively feasible.

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