August/September 2006 COBRA/HIPAA News

• Employee Was Entitled To Attorney Fees in COBRA Case


• CIA-Backed Investment Stirs Health Privacy Fears (8/14/06) - Government Health IT


• Administrator Failed to Meet Burden of Proving Good Faith Effort to Provide Required COBRA Notice

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Employee Was Entitled To Attorney Fees in COBRA Case (8/24/06) - 8th Cir.
Starr sued the employer and the administrator of its healthcare plan for failure to comply with the notice requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Starr prevailed after a bench trial, but the trial court declined to award a statutory penalty or attorney fees. The 8th Circuit affirmed in part, and reversed in part, concluding that 1) the trial court didn't abuse its discretion in declining to award a statutory penalty; and 2) the trial court did abuse its discretion in declining to award attorney fees.

Starr v. Metro Systems

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The 8th Circuit Court of Appeals' jurisdiction includes North Dakota, South
Dakota, Minnesota, Nebraska, Iowa, Missouri and Arkansas.

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CIA-Backed Investment Stirs Health Privacy Fears (8/14/06) - Government Health IT
The CIA-backed venture capital firm In-Q-Tel is investing money in a company that sells software used for managing electronic health records. Because U.S. and Canadian health care providers use that software extensively, privacy advocates say they are concerned about the CIA's role.

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Administrator Failed to Meet Burden of Proving Good Faith Effort to Provide Required COBRA Notice (8/1/06) - 8th Cir.

The Consolidated Omnibus Budget Reconciliation Act ("COBRA") requires the administrators of covered group health plans to notify terminated employees that they have the option of continuing their benefits after their employment ends.

Kelly Crotty filed the present lawsuit, claiming that she lost the opportunity to extend her health insurance coverage because Dakotacare Administrative Services failed to give her the required statutory notice. The district court concluded that Dakotacare had shown that it had made a good faith attempt to provide the notice, granted its motion for summary judgment, and denied Crotty's motion for partial summary judgment.

On appeal, the 8th Circuit reversed, finding that the plan administrator's audit report indicating that its computerized tracking system generated a notice letter to Crotty around the time she was terminated did not establish that the letter was printed or placed in the mail in a properly addressed envelope, as required for the administrator to show that it complied with its obligation to provide notice of eligibility for continuation of health insurance coverage.

Crotty v. Dakotacare Administrative Services

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The 8th Circuit Court of Appeals' jurisdiction includes North Dakota, South
Dakota, Minnesota, Nebraska, Iowa, Missouri and Arkansas.

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