A terminated employee sued her former employer for failure to provide a COBRA election notice under its group health plan, alleging that the employer knowingly directed its TPA to mail the notice to the wrong address. In a preliminary ruling, the court determined that factual disputes concerning the employee’s last-known address must be resolved at trial.

The ruling explains that the employer maintained separate personnel records for payroll and insurance purposes; to change an employee’s address, the employer had to update each system separately. The employee had notified the employer of an address change shortly after she started work, and the employer’s office director entered the new information in the payroll system.

When the employee enrolled in the employer’s group health plan about two months later, she inexplicably used her old address on the enrollment forms. The office director entered the old address in the insurance database, causing a discrepancy between the two record systems. When the employee terminated employment about a year later, the employer mailed her final paystub to the address in the payroll records. The employer also notified the TPA, and the TPA mailed a COBRA election notice—using the address found in the employer’s insurance records. In the meantime, the employee had moved yet again, just before her termination. She claimed to have notified the employer of the third address, but the employer disagreed. The employee alleged that the notice should have been mailed to her second address (presumably because the Post Office was forwarding her mail from that address). But the court, after noting that use of a qualified beneficiary’s “last-known address” generally satisfies good faith compliance, concluded that the factual questions about her last-known address left the court unable to resolve this matter short of a trial.

Source EBIA Weekly (5/17/2012)

Working together.