Tuesday, November 15, 2011

The Basics Of Health Savings Accounts

Saturday, November 12, 2011

Court Rules Actual Receipt of COBRA Election Notice Not Required

Court Rules Actual Receipt of COBRA Election Notice Not Required

In Hearst v. Progressive Foam Technologies, Inc., the Eighth Circuit Court of Appeals recently considered whether an employer must ensure that employees who experience a COBRA “Qualifying Event” must actually receive COBRA election notices. Generally speaking, employers that sponsor group health plans are required to provide notices that explain the COBRA election rights to eligible employees and their dependents who experience a Qualifying Event, within 44 days after the occurrence of the event.

In Hearst, an employee was terminated after failing to return to work from a leave of absence. The employee later sued the employer, claiming that he never received the required COBRA election notice. The lower court dismissed the employee’s claim because the employer provided a “mailing manifest” (i.e., log of daily mailings verified and date-stamped by US. Post Office) to show the employee’s COBRA election notice was, in fact, mailed.

On appeal, the Eighth Circuit determined that the issue presented by Hearst was whether the employer sent the notice by means “reasonably calculated” to be received by the employee and not whether the employee actually received the notice. The Eight Circuit affirmed the lower court’s decision, agreeing that the employee’s claim of not receiving the COBRA election notice was insufficient to overcome the employer’s proof that the notice was mailed.

As a best practice, employers, or their COBRA administrators, should distribute COBRA election notices by using first-class mail, being sure to document such mailings with records that meet a court’s evidentiary requirements. In general, courts accept business records and testimony from individuals with first-hand knowledge of the employer’s compliance practices as sufficient evidence of mailing.