DeGruise
v. Sprint Corp.
23 EBC 1277 (DC
ELa 1999)
Facts Of The
Case:
Sprint mailed a COBRA
Qualifying Event Notice, by certified mail, to Mr.
DeGruise upon his termination of employment with
Sprint. When the Postal Service attempted to
deliver the certified mail, no one was at Mr.
DeGruise’s home.
Therefore, the Postal
Service left a notice in Mr. DeGruise’s mailbox
indicating that certified mail was being held for his
benefit at the Post Office.
When DeGruise went to
the Post Office to claim the mail, the Postmaster could
not locate the item and informed Mr. DeGruise that, if
the item was important, the sender would almost certainly
re-mail the item to Mr. DeGruise.
In fact, the Postal
Service had returned the Qualifying Event Notice package
to Sprint, marked “unclaimed”, and Sprint
had simply placed the returned package in Mr.
DeGruise’s personnel file.
Although DeGruise
obtained medical coverage through his new employer, he
began treatment for a medical condition prior to
employment and the new medical plan denied these claims
on the basis that it was a pre existing condition.
Question
Presented:
The question present
to the court was whether Sprint’s actions satisfied
its obligations under COBRA’s Qualifying Event
Notice requirements.
Court's
Decision:
The court first noted
that COBRA only requires that an employer make a good
faith attempt to comply with the statute’s
Qualifying Event Notice requirements. The court
then found that Sprint had made a good faith
attempt to deliver the Qualifying Event Notice package,
and that the fact that it was not, in fact, delivered to
Mr. DeGruise was not due to any error or omission by
Sprint.
Therefore, the court
held that Sprint had satisfied its obligations under
COBRA and that Sprint was not subject to any compliance
penalties nor was Mr. DeGruise entitled to elect COBRA
coverage.
Implications For
Employers:
As we have noted in
prior issues of COBRA Quarterly, COBRA requires only that
communications be sent by first class mail (postage
prepaid), and sending Initial COBRA Notices and
Qualifying Event Notices by certified mail causes more
problems than it solves.
For example, if
Sprint simply had sent Mr. DeGruise’s Qualifying
Event Notice by first class mail (postage prepaid), and
kept adequate proof of that fact (e.g., a proof of
mailing certificate, a photocopy of the metered envelope
along with a copy of the Notice with a handwritten
notation from the individual who sent it, etc.), this
case probably would not have gone to trial.
That is, the letter
carrier would have left the Notice package in Mr.
DeGruise’s mailbox, eliminating his ability to claim
that Sprint failed to satisfy some COBRA-imposed
obligation.
Put another way,
certified mail is just as effective as proving someone
did NOT receive an important notice — as in the
DeGruise case — as it is at proving an important
notice was in fact received by its intended
recipient. And, having “proof in the
file” that a Qualified Beneficiary did NOT receive a
COBRA Qualifying Event Notice, or that an employee or a
spouse did NOT receive an Initial COBRA Notice, will
seldom be helpful to the employer.
The moral of this
story is that employers really only want to have one
thing in their files: proof that they met their
COBRA-imposed obligation to SEND, by first class mail
(postage prepaid), Initial COBRA Notices and Qualifying
Event Notices to the applicable individuals at their last
known addresses, and that employers should be generally
unconcerned with whether those Notices are actually
RECEIVED by their intended recipients.
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