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MLSNA v. UNITEL COMMUNS.

July 1, 1993

EILEEN D. MLSNA, Plaintiff,
v.
UNITEL COMMUNICATIONS, INC., Defendant. UNITEL COMMUNICATIONS, INC., Third Party Plaintiff, v. THEODORE M. MLSNA, Third Party Defendant.


Zagel


The opinion of the court was delivered by: JAMES B. ZAGEL

Plaintiff Eileen D. Mlsna ("Plaintiff") filed this action against defendant Unitel Communications, Inc. ("Unitel") claiming violation of the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"), 29 U.S.C. § 1161-1167 (1991). Specifically, Eileen Mlsna claims Unitel's failure to give her notice of her right to elect continuation of health care coverage violated the notice requirement of COBRA. 29 U.S.C. § 1166. She seeks retroactive coverage under Unitel's health care plan and payment for medical bills. Unitel filed a third party complaint against Theodore M. Mlsna claiming that any failure to comply with COBRA was due to his willful conduct. The parties have filed cross motions for summary judgment. *fn1"

 For reasons stated below, this Court grants plaintiff Eileen Mlsna's motion for summary judgment on the issue of liability. Defendant Theodore Mlsna's motion for summary judgment is granted. Defendant and third party plaintiff Unitel's motion for summary judgment is denied.

 "The Supreme Court [has] held that Rule 56(c), 'by its very terms, . . . provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.'" Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505, 2509-10, (1986) (emphasis in original). In the present case, the parties have filed cross motions for summary judgment. The material facts are not in dispute; therefore, summary judgment is proper.

 The following facts are not in dispute. From 1987 through 1989, Unitel employed plaintiff's spouse, Theodore Mlsna. During this time, Unitel's group health plan, covered Eileen Mlsna as a dependent of her spouse. On January 23, 1989, Theodore Mlsna submitted his resignation to Mr. Mallin, the president of Unitel. Either immediately or on January 25, 1989, Mr. Mallin relieved Theodore Mlsna of his duties. Following the termination of Theodore Mlsna's employment, Unitel did not notify plaintiff of her right to elect continuation of health care coverage under Unitel's group health plan. After plaintiff's coverage under Unitel's health care plan ended, she incurred substantial medical bills.

 I. APPLICABLE COBRA PROVISIONS

 In 1986, Congress enacted COBRA to amend the Employee Retirement Income Security Act ("ERISA") by providing for limited continuation coverage rights under employer-provided group health insurance plans. Swint v. Protective Life Ins. Co., 779 F. Supp. 532, 552 (S. D. Ala. 1991). Congress found ERISA did not adequately ensure individuals would not be abruptly left without health care coverage. Therefore, COBRA is remedial legislation. National Companies Health Plan v. St. Joseph's Hosp. Inc., 929 F.2d 1558, 1567 (11th Cir. 1991). The legislative history of the COBRA amendments shows Congressional concern "with reports of the growing number of Americans without any health insurance coverage and the decreasing willingness of our Nation's hospitals to provide care to those who cannot afford to pay." H. R. Rep. No. 241, Part 1, 99th Cong., 2d Sess. 44, reprinted in 1986 U.S.C.C.A.N. 579, 622. Congress designed COBRA to "allow a spouse or former spouse who has been a qualified beneficiary under a group plan to elect continuation coverage on his or her own behalf." Id.

 "The administrator's duties under COBRA are not onerous while the result of noncompliance could be disastrous for the discharged employee." Phillips v. Riverside, Inc., 796 F. Supp. 403, 411 (E.D. Ark. 1992). COBRA mandates:

 
The plan sponsor of each group health plan shall provide . . . that each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event is entitled, under the plan, to elect, within the election period, continuation coverage under the plan.

 29 U.S.C. § 1161(a). COBRA requires the plan administrator to notify any qualified beneficiary of her rights following a qualifying event. 29 U.S.C. § 1666 (4). COBRA defines a qualified beneficiary as any individual, who on the day before the qualifying event, is a beneficiary under the plan as the spouse of the covered employee. 29 U.S.C. § 1167(3). A qualifying event is an event that, but for the continuation coverage required under COBRA, would result in the loss of coverage of the qualified beneficiary. 29 U.S.C. § 1163. Employment termination for reasons other than gross misconduct is a specified qualifying event. 29 U.S.C. § 1163(3). After the beneficiary receives notice of her rights, she has sixty days to elect continuation coverage. 29 U.S.C. § 1165. The coverage must continue for at least eighteen months following the qualifying event, or until the qualified beneficiary becomes covered under another group plan. 29 U.S.C. § 1162.

 II. APPLICATION OF COBRA TO THIS CASE

 Unitel concedes that it is bound by COBRA. Unitel's employee handbook states that Unitel is the plan administrator of its medical plan. Unitel admits its medical plan covered Eileen Mlsna as a dependent of her spouse. The parties do not dispute that plaintiff spouse's employment terminated and that Unitel did not provide plaintiff with the required COBRA notice. Liability under these circumstances is warranted by COBRA and its legislative history.

 Unitel attempts to exculpate its conduct by maintaining that the circumstances surrounding this case exempt it from the mandated COBRA notification. Unitel basically raises three arguments: 1) Unitel terminated plaintiff spouse's employment for gross misconduct, and therefore plaintiff was not entitled to COBRA notification; 2) plaintiff's actions subsequent to her spouse's employment termination relieve Unitel of liability; and 3) Theodore Mlsna is responsible for Unitel's violation of COBRA. *fn ...


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