Employee Benefits-District Court Rules That Employer Failed To Provide Former Employee With Sufficient Notice Of COBRA Rights

In Griffin v. Neptune Technology Group, Civil Action No. 2:14cv16-MHT (WO) (M.D. Alabama 2015), plaintiff Joshua Griffin sued his former employer, Neptune Technology Group, claiming, among other things, that Neptune illegally failed to provide appropriate notice that he could continue his health-insurance coverage under COBRA after his termination of employment at Neptune, and seeking statutory damages for this failure.

Griffin’s primary complaint is that the contents of the notice Neptune uses were insufficient under the law to allow him to make an informed and intelligent decision whether to elect continued coverage under COBRA. The court noted that the regulations, at 29 C.F.R. § 2590.606-4, sets forth detailed requirements for the content of COBRA notices. It provides that the notice “shall be written in a manner calculated to be understood by the average plan participant and shall contain the following information,” and then lists 14 different categories of information that must be included.

The court further noted that the notice actually given to Griffin tracks the requirements of § 2590.606-4 in several respects. The notice gave him the deadline for returning the notice, the premium amounts for himself and his spouse or dependents, and the date by which the premium needed to be paid. However, it does not contain most of the items required by the regulation. Out of the 14 categories in 29 C.F.R. § 2590.606-4, the notice completely omits nine. In addition, subsection (b)(v) requires inclusion of “[a]n explanation of the plan’s procedures for electing continuation coverage, including an explanation of the time period during which the election must be made, and the date by which the election must be made.” While Neptune’s notice tells the reader that the election form must be returned within 60 days of the date of the letter and instructs the reader to “follow the instructions on the next page to complete the Enclosed Election form,” the instruction page was not included. Accordingly, the court concluded that the notice fails to adequately explain the plan’s procedures for electing coverage. As such, the court held that the Neptune notice fails to provide sufficient information of COBRA rights, and stated that an appropriate judgment will be entered against Neptune for this failure.