Berrios-Cintron v. Capitol Food, Inc.

In this case the employee sued his employer for penalties under COBRA, claiming that the employer failed to provide him with a COBRA initial notice when he commenced employment and provided a late and inadequate election notice when he resigned.  The employer argued that the initial notice had been provided to the employee and that even if the election notice was inadequate, no penalties should be imposed because there was no bad faith because the employee already was fully aware of his rights under COBRA, as he was responsible for managing the employer’s health plans). 

The court ruled that an adequate initial notice had been given.  The court found that the employee had executed the health plan agreement on behalf of the employer and that the agreement and the SPD attached to it provided full disclosure of the employee’s COBRA rights.  The court found that the employer had sent the employee a CORBA election letter notifying him of his rights to elect COBRA but that it was not sent within the required 14-day period.  The court ruled that neither the employee’s actual knowledge of his rights under COBRA or his prior COBRA-related job responsibilities relieved the employer from its obligation to provide the election notice.   The court did not impose any penalties however because the court found that there was no evidence that the employee suffered prejudice as a result of the late election notice or that the employer acted in bad faith. 

Note:  that although the employer is also administering COBRA themselves, the court is still holding them to the 14-day period and not the 44 day period that the DOL final regulations allow, when the employer and plan administrator are the same, for providing the COBRA election notice.