I am entitled to COBRA continuation health coverage, but my employer never sent me a COBRA election notice after I lost my job. Am I entitled to compensation?

fadi-yousefLikely yes. The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers (or their plan administrators) to notify qualified employees of their entitlement to the continuation of the same health coverage that they would have otherwise lost due to specific qualifying events, like a job loss. Failure to do so may expose the employer to statutory penalties of up to $110 per day, reimbursement of medical bills incurred by the employee, and the employee’s attorneys’ fees and costs.

COBRA requires temporary continuation coverage (usually 18 months) to be offered to covered employees, their spouses, former spouses, and dependent children (qualified beneficiaries) when group health coverage would otherwise be lost due to certain specific qualifying events. The two qualifying events that affect employees are (1) termination of employment for reasons other than gross misconduct, and (2) reduction in work hours.

To be entitled to elect COBRA continuation coverage, you must have been enrolled in a group health plan that your employer offered, and the plan must be covered by COBRA. A plan is generally covered if it is maintained by a private employer with 20 or more employees, or by state or local governments. As stated earlier, there must also be a qualifying event that causes you to lose your health coverage (e.g., job loss or reduction in work hours).

For example, if you are terminated (or you quit) for any reason other than gross misconduct, you should receive a COBRA election notice that explains your COBRA rights and gives you at least 60 days to decide if you want to elect COBRA coverage or choose something else. The COBRA coverage must be identical to the one you had immediately before your job loss. Each of the qualified beneficiaries for a qualifying event may independently elect COBRA coverage. This means that if both you and your spouse are entitled to elect continuation coverage, you each may decide separately whether to do so.

When your employer terminates your employment, the employer must notify your plan administrator of the termination within 30 days of the termination. The plan administrator then has 14 days to send you your COBRA election notice. Note that in some instances, your employer can also be the plan administrator at the same time. In this situation, the employer-plan administrator in most jurisdictions has 44 days to send you the COBRA election notice. It is important that you make sure your employer has your up-to-date address on file.

What if I don’t receive my COBRA election notice after losing my job?

If you are entitled to COBRA continuation coverage and your employer fails to timely send you an election notice, you may be entitled to compensation. In a situation like this, the employer can be subject, at the court’s discretion, to a penalty that is payable to you of up to $110 per day for each day the notice is late as well as the cost of medical expenses incurred by you or your qualified dependents because you did not have insurance. The court can also award attorneys’ fees and costs.

Courts generally rely on a number of factors in determining how much penalties to impose, if any. Some of those factors include (1) the harm you suffered; you are far more likely to receive penalties if you were “prejudiced,” (2) the employer’s bad intent or bad faith, (3) long delay in sending the notice, (4) you made multiple requests without a response, and (5) employer’s credibility at trial. You will have a stronger case for high penalties if you were prejudiced by the employer’s failure; for example, you or your qualified dependents incurred substantial medical fees or you postponed or did not have a needed surgery or other treatment because you could not afford it without insurance.

If it has been more than 44 days since you lost your job and your former employer has not sent you the COBRA election notice, contact my office to schedule an initial consultation.

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