Davis v. World Ins. Assocs., LLC, 2023 WL 2665727 (D.N.J. 2023)

Accessible at https://www.govinfo.gov/content material/pkg/USCOURTS-njd-2_22-cv-06392/pdf/USCOURTS-njd-2_22-cv-06392-0.pdf

As half of a bigger employment discrimination lawsuit, a former worker alleged that her employer didn’t notify her of her COBRA rights or well timed course of her request for continued well being protection. The employer requested the courtroom to dismiss the COBRA declare, arguing that the worker’s severance settlement notified her of her COBRA eligibility. The settlement supplied that the worker would “obtain a COBRA…Election Discover. . .at [her] residence deal with throughout the subsequent 14 Enterprise Days” that would come with “info concerning COBRA protection and various choices.”

The courtroom decided that whereas the severance settlement supplied the worker with preliminary discover that she had rights underneath COBRA, it didn’t point out whether or not the worker acquired the extra info or if the employer well timed processed the worker’s request for continued protection. Thus, the courtroom denied the employer’s movement to dismiss, permitting the COBRA declare to proceed to trial.

EBIA Remark: Whereas the result of this case is but to be determined, it reminds us that severance agreements usually are not an alternative to COBRA compliance. In planning severance packages, employers and staff have choices for coordinating severance and COBRA. For instance, employers could conform to subsidize the price of COBRA protection for a specified interval. Whatever the provisions of the severance settlement, employers should administer their plans according to COBRA, together with well timed notification to the plan administrator of the COBRA qualifying occasion and well timed provision of a COBRA election discover to the worker (and associated certified beneficiaries) with whom it has made a severance settlement. For extra info, see EBIA’s COBRA handbook at Part VII.M (“Particular Points: Severance Agreements and Severance Pay”).

Contributing Editors: EBIA Workers.