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Lessons from the Courts: When COBRA strikes

by on
in Employee Benefits Program,Human Resources

The massive new health care legislation will have a long-lasting impact for years to come. But another health care law enacted almost 25 years ago—the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)—might be a more immediate concern.

Under COBRA, an ex-employee who loses his or her job is generally eligible to receive continued health insurance coverage for up to 18 months (as long as 36 months in certain cases). COBRA applies to employers with 20 or more full-time employees. But extended coverage isn’t automatic, as evidenced by two new cases.

Case 1: A professor was fired after the college learned he had pleaded guilty to various frauds. The school also discovered he had falsified his credentials and had never earned a bachelor’s degree. These actions constituted “gross misconduct,” so COBRA coverage can be denied. (Moore v. Williams College, C.A. No. 09-cv-30208-MAP, 4/7/10)

Case 2: A hospital fired a nurse when she “mooned” a male co-worker during a dispute. Although this violated workplace standards, it was an isolated act, not gross misconduct. Therefore, she is entitled to COBRA coverage. (Storment-Vail Health Center v. Revis, Case No. 10-4052-RDR, DC-KA,5/27/10)

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