Last Known Address Important for COBRA

April 15, 2008

The importance of the last known address became a matter of court record when Steven Hill (Hill) sued his former employer, Zimmer, Inc. (Zimmer), for failure to send his COBRA notice to his current address. He also sued for claims of retaliation for taking FMLA.

Hill claimed Zimmer "knowingly caused his COBRA notice to be sent to the wrong address, causing the denial of health care benefits for which he otherwise would have retained coverage." Hill claimed he notified his supervisor in October 2005, prior to his termination in December 2005, of his new address. He claimed he never received his COBRA notification and contacted his supervisor on several occasions requesting information. The issue focused on whether the employer made a "good faith attempt" to mail the notice to the employee's last known home address, as required by law.

The COBRA notice was sent to an address that Hill had previously provided. Even with the argument that he had provided a change of address, he was not able to demonstrate that the plan administrator had failed to notify him of his COBRA rights. In fact, he continued to use his old address after his termination (for an EEOC filing). The court ruled that since Hill was receiving mail at this prior address, his claim against Zimmer regarding his COBRA notice being sent to the wrong address, be dropped.

The court did not find that Hill was retaliated against due to any FMLA leave taken during his employment with Zimmer. FMLA entitles eligible employees up to 12 weeks of unpaid leave per year for "care of a child after birth, adoption or placement for foster care; to care for their spouse, son, daughter or parent who suffers from a serious health condition; or to care for their own serious health condition that prevents them from performing their job." Hill was not able to prove that his taking any FMLA leave would have changed the outcome of his termination.

Proper COBRA administration requires employers to notify Qualified Beneficiaries of their rights to continuation coverage after experiencing a qualifying event. These notices should be in writing. The suggested delivery method is via first class mail to the last known address. The law clearly states that it is the plan administrator/employer's responsibility to prove that the notice was sent to the Qualified Beneficiary.

The Final DOL Notice regulations require that both the General Notice and the Election Notice include information on keeping an up-to-date address with the plan administrator. An employer is best served to have standard procedures in place when an employee provides a new mailing address, especially if a third party administrator is handling COBRA. Even with all this information available on how to notify of an address change, an employer would be prudent to verify an employee’s last known address in an exit interview.

While this case did not discuss proof of mailing, a successful COBRA compliance program includes proof that a Qualifying Event Notice is sent timely. The best manner to fulfill that is to send these important notifications via U.S. Postal Service first class mail with a certificate of mailing from the Post Office. This method shows that an actual notice was sent on a certain date to an individual(s) and the address where it was mailed. In addition, make sure that written procedures are set in place with precisely what methods are used to provide COBRA notices and that those methods are being consistently followed each time. The end reward is staying out of the courtroom.