Employers who ignore their basic COBRA responsibilities and do not send COBRA election notices when required, do so at their own risk.

An employee of a Florida company, Babies and Beyond Pediatrics (B&BP), Barbara Doss-Clark who was a nurse, was diagnosed with breast cancer.  She was able to work while undergoing chemotherapy.  However, a few months later while still in treatment, she was terminated. It was suggested to her by B&BP that she should apply for Social Security Disability. At the time of termination B&BP offered her two weeks pay and promised to let her remain on health insurance for two more months.

About a month later, Doss-Clark was told that her medical coverage had already been cancelled.  A few days later, she asked her B&BP for a COBRA election form.  B&BP did not respond.  Months later, she again asked for a COBRA election from.  B&BP responded that they had sent an election form 15 days after her termination.   B&BP ignored a Department of Labor inquiry.  Some 10 months after the qualifying event B&BP did send a COBRA election notice that stated the COBRA coverage period would begin three months after the date the notice was sent and several months after her chemotherapy ended.

Barbara Doss-Clark sued B&BP under the COBRA regulations as won.  B&BP was ordered to pay the following damages under COBRA:

Unpaid medical expenses (less applicable premium)                    $8,190

Daily Notice failure penalty ($110 x 338 days)                             $37,180

Attorney Fees                                                                           $21,790

In awarding these damages, the court found both that Doss-Clark had suffered prejudice and harm and that B&BP had acted in bad faith.  Those two factors are a bad combination for employers when the issue at hand is COBRA.