Although an employer/plan administrator put an "incorrect"
return date on a COBRA election form, it was not obligated to provide COBRA
coverage because even based on the correct date, the qualified beneficiary´s
election was untimely, the 8th U.S. Circuit Court of Appeals ruled in an
unpublished opinion. The case is Deering
v. O.K. Industries, Inc., 2001 WL 498221 (8th Cir., May 11, 2001).
Tracy Deering terminated employment at O.K. Industries on
July 17, 1998. On July 24, 1998, Deering received by certified mail a COBRA
election notice and form. The notice stated that she had to submit the election
form to the plan administrator by Sept. 17, 1998.
COBRA provides that generally, qualified beneficiaries have
at least 60 days from the date they are
sent an election notice to elect COBRA coverage. The court opinion
indicated that the date in Deering´s notice was "incorrect" by being five days
short. In the court´s view, Deering´s election period ran until Sept. 22, 1998, which was 60 days from
the date that she received the
notice. In actuality, the court was
incorrect, for the election period starts running when the notice is sent. But as indicated below, this
misinterpretation did not affect the outcome of the case.
O.K. Industries did not receive Deering´s election form
until Sept. 28, 1998, and therefore denied COBRA coverage. Deering sued the
company for COBRA notice violations. When a federal district court ruled in
O.K. Industries´ favor, Deering appealed.
She argued that the district court´s ruling was in error
because her election notice had the incorrect date to return the form, giving
her 55 days, rather than 60 days, to elect coverage. Therefore, she alleged
that the company violated COBRA´s notice rules and should pay $23,000 in
medical expenses that her COBRA coverage would have otherwise paid.
The 8th Circuit disagreed, finding that although the form
had the "incorrect" date, she did not return that form until Sept. 28 - six
days after the "correct" date of Sept. 22. Therefore, her election was untimely
in any case. Accordingly, the 8th Circuit affirmed the lower court´s decision.
The trouble with this case from a technical standpoint is
that the court based all of the relevant time periods on when the parties received the notices/election forms -
not from when the forms were sent. That is, the court stated that the election
period began 60 days from when the qualified beneficiary received the COBRA
notice. This was wrong. The COBRA election period is measured from when the
notice is sent. Â
The court then stated that the election was late because the
company did not receive it within 60 days of when the qualified beneficiary
received the COBRA notice. Again, the court was wrong. The issue here is not
when the plan administrator receives
the election form; instead, it is when the qualified beneficiary sent the election form to the plan
administrator. It is possible that the election could be postmarked within the
proper 60-day election period, and yet received by the plan administrator after
the end of that election period. In such a case, the qualified beneficiary´s
election would be timely under COBRA.
Â
From Mandated Health Benefits: The Cobra Guide, ©Thompson
Publishing Group, Inc.