DeGruise v. Sprint Corp.
23 EBC 1277 (DC ELa 1999)

Facts Of The Case:

Sprint mailed a COBRA Qualifying Event Notice, by certified mail, to Mr. DeGruise upon his termination of employment with Sprint.  When the Postal Service attempted to deliver the certified mail, no one was at Mr. DeGruise’s home. 

Therefore, the Postal Service left a notice in Mr. DeGruise’s mailbox indicating that certified mail was being held for his benefit at the Post Office. 

When DeGruise went to the Post Office to claim the mail, the Postmaster could not locate the item and informed Mr. DeGruise that, if the item was important, the sender would almost certainly re-mail the item to Mr. DeGruise.

In fact, the Postal Service had returned the Qualifying Event Notice package to Sprint, marked “unclaimed”, and Sprint had simply placed the returned package in Mr. DeGruise’s personnel file.

Although DeGruise obtained medical coverage through his new employer, he began treatment for a medical condition prior to employment and the new medical plan denied these claims on the basis that it was a pre existing condition.

Question Presented:

The question present to the court was whether Sprint’s actions satisfied its obligations under COBRA’s Qualifying Event Notice requirements.

Court's Decision:

The court first noted that COBRA only requires that an employer make a good faith attempt to comply with the statute’s Qualifying Event Notice requirements.  The court then found that Sprint  had made a good faith attempt to deliver the Qualifying Event Notice package, and that the fact that it was not, in fact, delivered to Mr. DeGruise was not due to any error or omission by Sprint. 

Therefore, the court held that Sprint had satisfied its obligations under COBRA and that Sprint was not subject to any compliance penalties nor was Mr. DeGruise entitled to elect COBRA coverage.

Implications For Employers:

As we have noted in prior issues of COBRA Quarterly, COBRA requires only that communications be sent by first class mail (postage prepaid), and sending Initial COBRA Notices and Qualifying Event Notices by certified mail causes more problems than it solves. 

For example, if Sprint simply had sent Mr. DeGruise’s Qualifying Event Notice by first class mail (postage prepaid), and kept adequate proof of that fact (e.g., a proof of mailing certificate, a photocopy of the metered envelope along with a copy of the Notice with a handwritten notation from the individual who sent it, etc.), this case probably would not have gone to trial. 

That is, the letter carrier would have left the Notice package in Mr. DeGruise’s mailbox, eliminating his ability to claim that Sprint failed to satisfy some COBRA-imposed obligation.

Put another way, certified mail is just as effective as proving someone did NOT receive an important notice — as in the DeGruise case — as it is at proving an important notice was in fact received by its intended recipient.  And, having “proof in the file” that a Qualified Beneficiary did NOT receive a COBRA Qualifying Event Notice, or that an employee or a spouse did NOT receive an Initial COBRA Notice, will seldom be helpful to the employer.

The moral of this story is that employers really only want to have one thing in their files: proof that they met their COBRA-imposed obligation to SEND, by first class mail (postage prepaid), Initial COBRA Notices and Qualifying Event Notices to the applicable individuals at their last known addresses, and that employers should be generally unconcerned with whether those Notices are actually RECEIVED by their intended recipients.

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