Defendant’s motion to dismiss was granted because the plaintiff failed to pay premiums for COBRA continuation coverage.

The plaintiff had sustained a work-related injury and was forced to go on disability leave as a result. At some point after going out on disability, the plaintiff was no longer entitled to health insurance under the plan. As a result, he signed up for COBRA continuation coverage. Initially, the plaintiff’s application for COBRA coverage was not accepted. The plaintiff appealed this decision to the defendant and requested to be reimbursed for the private health insurance premiums and out-of-pocket medical expenses he had incurred. Before the appeal was decided, the plaintiff entered into a separation agreement with his former employer. As part of the agreement, the plaintiff could either take a lump sum payment or continue his existing company-sponsored health insurance coverage for a total of eight months. The defendant then granted the plaintiff’s appeal in part and denied it in part. It denied the appeal to the extent that the plaintiff sought reimbursement for private insurance premiums and out-of-pocket expenses. However, the defendant granted the appeal to the extent the plaintiff sought COBRA continuation coverage. The defendant acknowledged that it had made a mistake when it rejected the initial application for coverage. The plaintiff was given 45 days to submit his retroactive monthly contributions to the defendant. If these contributions were timely provided, the defendant would use the money that the plaintiff’s former employer had provided, pursuant to the agreement with the plaintiff, to pay for the plaintiff’s COBRA premiums through December of that year. However, because the plaintiff failed to make the monthly contributions, the fund refused to provide the continuation coverage. The district court held that because the plaintiff had failed to pay the required premiums, he was not entitled to COBRA continuation coverage retroactively. The court also held that the defendant was not required to provide the plaintiff with coverage through December, dismissing the plaintiff’s claims for breach of contract and bad faith since the plaintiff’s exclusive remedy was pursuant to the ERISA.

Case Law Alerts, 4th Quarter 2013