Failure to Provide COBRA Notice Tolls Statute of Limitations

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Under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), an employer that sponsors a group health plan is generally required to provide an employee with a right to continue healthcare coverage after the employee’s termination of employment. The employer (or its healthcare administrator) must also notify terminated employees of their COBRA rights. This notice must be given within 44 days from the date of the employee’s termination of employment. Although COBRA does not provide a limitations period for improper-notice claims (i.e., the statute of limitations), courts “borrow” the most analogous limitations period from the forum state. On August 22, the United States Court of Appeals for the Eleventh Circuit ruled on the timing of that notice and the statute of limitations for improper-notice claims.

In Cummings v. Washington Mutual, Cummings v. JPMorgan Chase Bank (11th Cir., 10-101076, 8/22/11), a former employee claimed that because he did not receive his COBRA notice, he personally incurred over $2,000 in medical expenses on behalf of his wife. The employee had terminated employment in March 2007 and learned of his failure to receive a COBRA notice in March 2008, when he met with his lawyer. The former employee filed an action under COBRA in July 2008.

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