Rodriguez v. Intern. College of Business and Tech.

• Decision Date: 12 January 2005
• Docket Number: No. CIV.03-2231(HL).,CIV.03-2231(HL).
• Citation: 364 F.Supp.2d 40
• Parties: William Ceinos RODRÍGUEZ, et al., Plaintiffs, v. INTERNATIONAL COLLEGE OF BUSINESS AND TECHNOLOGY, INC. d/b/a International Junior College, Defendant.
• Court: U.S. District Court — District of Puerto Rico

364 F.Supp.2d 40

William Ceinos RODRÍGUEZ, et al., Plaintiffs, v. INTERNATIONAL COLLEGE OF BUSINESS AND TECHNOLOGY, INC. d/b/a International Junior College, Defendant.

No. CIV.03-2231(HL).

United States District Court, D. Puerto Rico.

January 12, 2005.

COPYRIGHT MATERIAL OMITTED

Anthony J. Murray-Steffens, Davila, Pesquera & Murray Law Office, San Juan, PR, for Plaintiffs.

Jose A. Hernandez-Mayoral, Hernandez Mayoral Law Office, San Juan, PR, for Defendant.

OPINION AND ORDER

LAFFITTE, District Judge.

Plaintiffs William Ceinos Rodríguez ("Ceinos") and Carmen Rodríguez Capblanc ("Ms.Rodríguez") filed this action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., alleging that defendant International College of Business and Technology d/b/a International Junior College ("International College") violated Consolidated Omnibus Budget Reconciliation Act's (COBRA), 29 U.S.C. § 1166, et seq., notification and documentation requirements. Specifically, plaintiffs contend that International College violated COBRA when it failed to provide them with a summary plan description and notice of their rights to continue coverage under the group health plan after a qualifying event. Plaintiffs seek to recover civil penalties, damages, attorneys' fees, and costs.

FINDINGS OF FACT

This case was tried before the Court on January 4, 2005. Having considered the evidence and the parties' briefs, the Court is now ready to rule.

(1) On January 15, 1992, William Ceinos Rodríguez ("Ceinos") began employment with defendant International College of Business and Technology d/b/a International Junior College ("International College"). Ceinos worked for International College for approximately eleven and a half years. During this tenure, he held various positions within International College, most recently: advisor to the president, chancellor, and director of International College's San Juan and Bayamón campuses.

(2) Upon the onset of Ceinos' employment with International College, Ceinos and his mother, Carmen Rodríguez Capblanc ("Ms.Rodríguez"), became participants in International College's employer-sponsored group health plan provided through Cruz Azul (Blue Cross). International College contributed $50 per month toward Ceinos' health plan coverage, while Ceinos supplied the balance of approximately $110 a month. Additionally, Ceinos paid the full premium amount for Ms. Rodríguez's coverage under the plan.

(3) On June 18, 2003, Ceinos' employment with International College was terminated for a reason other than gross misconduct.¹

(4) Ceinos' and Ms. Rodríguez's group health coverage was cancelled by International College on August 1, 2003.

(5) At sometime in July 2003, Ceinos telephoned Wanda Ivelise Pagan, a payroll and human resources officer for International College, requesting information about liquidation of his vacation time. During this conversation, the topic of health benefits arose. Ms. Pagan stated that there is a law called COBRA which governs employee health insurance and that Ceinos had rights under this law. Ms. Pagan did not offer any specifics about the entitlements or obligations provided under COBRA. Ceinos did not ask any questions or otherwise respond to Ms. Pagan's statements about COBRA.

(6) On August 28, 2003, Ceinos hand-delivered a letter dated August 12, 2003, to Edgar Morales Ramirez, co-chairman of International College's board of directors. This letter asserted that International College had not provided Ceinos or Ms. Rodríguez with the option of electing to continue health coverage as required by COBRA and that he would seek judicial recourse if International College did not reinstate their health benefits. (See Ex. 1).

(7) After receiving Ceinos' letter, Edgar Morales Ramirez forwarded the letter and a drafted response to his attorney, José Hernández Mayoral. In turn, Attorney Hernández Mayoral sent a reply addressed and directed to Ceinos' attorney Leonardo Delgado Navarro,² stating that, "[a]s management had already informed your client, International will maintain the coverage of William Ceinos active according to the rights conferred by COBRA, provided he complies with his obligations under said law." (See Ex. B).

(8) In late August or early September of 2003, Ceinos secured health insurance through the local bar association. The cost of this insurance was approximately $190 a month and was not available to Ms. Rodríguez. At a later date, Ceinos enrolled in a medical plan provided to employees of the Commonwealth of Puerto Rico which cost approximately $180 a month. Ceinos included Ms. Rodríguez as a secondary beneficiary in this plan.

DISCUSSION

I.

The Consolidated Omnibus Budget Reconciliation Act (COBRA), 29 U.S.C. § 1161, et seq., requires that employers allow former employees the opportunity to elect the continuation of coverage under the same terms of the employer's group health plan at the employee's own cost for a maximum of eighteen (18) months after the occurrence of certain "qualifying events." 29 U.S.C. § 1161, 1162(2)(A)(i); see Gaskell v. Harvard Coop. Soc'y, 3 F.3d 495, 498 (1st Cir.1993). COBRA requirements apply to employers which employ twenty (20) or more employees on a given calendar day. 29 U.S.C. § 1161. In the present case, the parties do not dispute that defendant International College is covered by COBRA.

COBRA requires that employees and other qualified beneficiaries receive notice of their right to continue coverage under the employer's group health plan, at two points in time: (1) at the commencement of the participant's coverage under the plan, and (2) after a "qualifying event," such as termination of employment. See 29 U.S.C. § 1166(a)(1), (a)(4); Torres-Negon v. Ramallo Bros. Printing, Inc., 203 F.Supp.2d 120, 124 (D.P.R.2002); Morales-Cotte v. Cooperativa de Ahorro y Credito Yabucoeña, 73 F.Supp.2d 153, 155 (D.P.R.1999). The initial notice requirement provides that an employer must notify the plan participant of his COBRA rights in writing upon the initiation of coverage under the group health plan. 29 U.S.C. § 1166(a)(1). This general notice must include basic information regarding COBRA and the rights and responsibilities of qualified beneficiaries. See id.; Gonzalez Villanueva v. Warner Lambert, 339 F.Supp.2d 351, 358-59 (D.P.R.2004).

Termination of employment, for a reason other than the employee's gross misconduct, which results in loss of coverage under the employer's group health plan is a "qualifying event." 29 U.S.C. § 1163(2); Morales-Cotte, 73 F.Supp.2d at 155. After a "qualifying event," two notice requirements are triggered. First, the employer must notify the group health plan administrator of the employee's qualifying event within thirty (30) days of said event. 29 U.S.C. § 1166(a)(2). Second, after notification by the employer, the plan administrator has fourteen (14) days to notify qualified beneficiaries of their right to continue coverage under the plan. 29 U.S.C. § 1166(a)(4)(A). When the employer and the plan administrator are the same entity, the employer has forty-four (44) days from the date of the qualifying event to notify qualified beneficiaries of the right to maintain coverage. Gonzalez Villanueva, 339 F.Supp.2d at 358-59.

II.

The first inquiry that the Court must consider is whether plaintiffs were entitled to notice of the right to continue health plan coverage pursuant to COBRA. In the present case, there is no indication that Ceinos' employment with International College was terminated for gross misconduct, and thus, Ceinos' termination of employment on June 18, 2003, constitutes a qualifying event for COBRA purposes. See 29 U.S.C. § 1163(2). Therefore, Ceinos was entitled to notice of the option to elect continuing coverage under COBRA at both the initiation of his participation in defendant's group health plan and after his termination of employment. See 29 U.S.C. § 1166(a). Conversely, Ceinos' mother, Carmen Rodríguez Capblanc, was never entitled to notice under COBRA. COBRA's notification requirements provide that at the commencement of coverage under the group health plan, only the covered employee and the spouse of the employee (if any) shall be provided notice of COBRA rights. 29 U.S.C. § 1166(a)(1). Moreover, after a qualifying event, only qualified beneficiaries are entitled to notice. 29 U.S.C. § 1166(a)(4)(A). The term "qualified beneficiary" is limited to employees covered under the employer's group health plan and the employee's spouse or dependent children. 26 U.S.C. § 4980B(g)(1)(A). Therefore, Ceinos' mother, Carmen Rodríguez Capblanc, was not a qualified beneficiary and hence, was not entitled COBRA notice. Accordingly, plaintiff Carmen Rodríguez Capblanc's claims arising from alleged violations of 29 U.S.C. § 1166 are dismissed in their entirety.

We turn now, to whether adequate notice of COBRA rights were provided to Ceinos at (1) the onset of coverage under defendant's group health plan or (2) upon his termination of employment. Ceinos testified that he never received notification of his rights under COBRA at any point during his employment nor after his termination. International College contends that Ceinos was provided notice of COBRA after his termination on two occasions: first, in June 2003 during a telephone conversation with defendant's human resources and payroll officer Wanda Pagan and second, through a letter written by defendant's attorney and mailed to Ceinos' attorney in September of 2003.³

In actions for remedies under COBRA, the medical plan administrator bears the burden of proving that adequate COBRA notification was provided to qualified beneficiaries. Torres-Negron v. Ramallo Bros. Printing, Inc., 203 F.Supp.2d 120, 124 (D.P.R.2002) (citing Stanton v. Larry Fowler Trucking, 52 F.3d 723 (8th Cir.1995) (holding that an employee's testimony that he never received notice of right under COBRA to continue participating in employer's group health...