• FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR

  • LOGIN
  • SIGN UP FREE

HR Morning

  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • More
    • Leadership & Strategy
    • Compensation
    • Staff Administration
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • Employee Services
    • Work Location
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans

COBRA lawsuit: Pro-employer ruling shows importance of ‘good faith’ efforts

Jared Bilski
by Jared Bilski
January 27, 2016
2 minute read
  • SHARE ON

When an employer accidentally fails to send a timely COBRA notice to a terminated employee, is the company doomed to pay steep penalties if the individual sues?  
That question was put to the test in a recent COBRA lawsuit.

The impact of missed care

In this case — Rivera v. Union de Tronquistas de Puerto Rico Local 901 — an employee sued his former employer for failing to provide a COBRA notice.
He argued that the employer’s mistake had impacted his access to medical care and that both he and his spouse had foregone necessary care because of the lack of coverage.
While the company acknowledged its error, it said there was no evidence the mistake was intentional or that the former employee was “prejudiced” by the missed notice.
A court dismissed the request for a trial and decided not to impose any statutory penalties on the employer.
As employers know, under ERISA failing to provide a COBRA notice to a qualified individual can carry statutory penalties of up to $110 per day, which can really add up.

Not always forgiving

So does this ruling mean courts are less likely to slap employers with statutory penalties if they can prove the COBRA mistake was an honest one?
No.
Granted, courts are generally more willing to work with firms that can prove – through detailed recordkeeping – their “good faith” efforts to comply with COBRA regs.
But we’ve also seen plenty of recent COBRA lawsuits where courts imposed the maximum fines and penalties on employers for seemingly innocent mistakes.

2 proven safeguards

In addition to solid recordkeeping, employers should do a self-audit of their own COBRA processes every so often.
If you’re wondering what to look for, the IRS offers a checklist of its own audit guidelines here.
And if you outsource your COBRA administration, it’s critical to have a clear understanding of your third-party administrators’ (TPAs) processes.
Reason: Courts have consistently ruled that it’s the employer, not the TPA, that’s ultimately on the hook for any COBRA compliance violations.

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES

Keep Up To Date with the Latest HR News

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

Sign up for a free HRMorning membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
HR Morning Logo
  • Facebook
  • Twitter
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • HR Technology
  • Performance Management
  • Leadership & Strategy
  • Compensation & Payroll
  • Policy & Culture
  • Staff Administration
  • Wellness & Safety
  • Staff Departure
  • Employee Services
  • Work Location
  • HR Career & Self-Care

HRMorning, part of the SuccessFuel Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

preloader