Federal Court Finds Employer’s Documentation of COBRA Notice Mailing Procedures Inadequate

On October 5, 2022, in Earl v. Jewel Food Stores, the US District Court for the Northern District of Illinois ruled an employer failed to document a good faith attempt to provide the required COBRA election notice to a terminated employee.

The plaintiff, Billy Earl, sued his former employer Jewel Food Stores, alleging failure to provide a COBRA election notice and multiple counts of discrimination related to his termination. Jewel Food Stores served as the group health plan administrator responsible for providing COBRA election notices. In addressing the COBRA claim, the court began with the premise that employers must be able to prove a COBRA election notice was provided in good faith, although proof of receipt is not required. An employer can satisfy this obligation by sending the required notice by first class mail with a post office certificate of mailing or certified mail and with evidence of standard office procedures for generating and mailing COBRA notices, plus evidence that the procedures were followed in a disputed instance.

Mr. Earl’s employer was only able to produce an appropriately addressed COBRA election notice and internal document certifying the election notice was mailed. There was no evidence of sending the COBRA election notice by first class or certified mail, no evidence regarding the company’s standard COBRA notice mailing procedures and no evidence regarding whether such procedures were followed as to Mr. Earl’s election notice. Accordingly, the court found the employer did not meet its burden of proving it made a good faith effort to notify Mr. Earl of his COBRA rights.

The Earl case serves as an important reminder for employers to review their COBRA election notice procedures, whether that means internal procedures or those followed by a third-party administrator. If a former employee (or other COBRA qualified beneficiary) sues their employer for failure to offer COBRA coverage, most courts have held that the plan administrator (typically, the employer) has the burden of proving the election notice was properly sent. Employers should adopt suitable record retention policies, keeping in mind they may be called upon to prove mailing years after the COBRA qualifying event.

Earl v. Jewel Food Stores, et al. »