By Gwen Cofield
Employers and plan administrators should ensure that adequate procedures are in place so that Consolidated Omnibus Budget Reconciliation Act (COBRA) election notices are sent on a timely basis to qualified beneficiaries. If a third-party administrator (TPA) is used to provide COBRA coverage, an employer’s or plan administrator’s responsibility does not end after notice of the qualifying event is given to the TPA. The plan administrator is ultimately responsible for any COBRA notice failures and, therefore, should monitor the TPA to ensure that notices are sent on a timely basis.
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Three employees who were members of the same family were terminated from employment after they assisted a lawsuit brought by a job candidate alleging a violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA). Two of the employees alleged notice violations under COBRA and sought to hold particular corporate executives personally liable for the failure.
The court held that individuals working in their official capacity for an employer are generally not subject to personal liability for COBRA notice failures unless evidence exists to pierce the corporate veil. Therefore, the plaintiff’s COBRA notice failure claims were dismissed without prejudice.