Sixth Circuit Recognizes Business Records as Sufficient Proof of Notification of COBRA Rights

On June 30, 2017, the U.S. Court of Appeals for the Sixth Circuit, in Perkins v. Rock-Tenn Servs., Inc., 2017 WL 2829100 (6th Cir. 2017), affirmed a ruling from the U. S. District Court for the Western District of Michigan, holding that a COBRA Election Notice had been properly sent to a former employee. The case was an employment discrimination lawsuit. In the district court case, the employee (Perkins) also claimed that the employer (Rock-Tenn) failed to send her an election notice allowing her to continue her health insurance benefits, as is required under COBRA. Rock-Tenn moved for summary judgment, which the district court granted as to all claims. Perkins appealed the decision to the U.S. Court of Appeals for the Sixth Circuit.

In affirming the lower ruling, the court found that even though neither hard copies of sent notices nor certificates of mailings were retained, there were sufficient computer and business records to demonstrate that the required notice had been provided.

In order to refute a claim for failure to offer COBRA, the employer must be able to show that an election notice was sent. In proving that the notice was sent, the DOL has said that the focus is on the reasonableness of the procedures used to furnish COBRA notices, and the analysis doesn’t require guaranteed delivery. Rather, plan administrators need only prove that the election notice was sent to the qualified beneficiary by a method that’s reasonably calculated to reach the qualified beneficiary.

With that in mind, the best proof would consist of a copy of the notice actually sent to the beneficiary, bearing each qualified beneficiary’s name or status and showing the address to which the notice was sent, plus proof that the notice was mailed to the address shown on the retained copy of the notice on a particular date. As this case demonstrates, however, this isn’t necessarily required. If an employer doesn’t keep a hard copy of the notice and proof of mailing, it would be wise to maintain significant business records (including possibly computer records) of the process used when issuing COBRA notices.

Perkins v. Rock-Tenn Servs., Inc. »