United States Court of Appeals 

for the Fifth Circuit 

No. 21-30022 

Kathran Randolph, 

Plaintiff—Appellant, 

versus

East Baton Rouge Parish School System, 

Defendant—Appellee. 

Appeal from the United States District Court for the 

Middle District of Louisiana 

3:15-CV-654 

Before Higginbotham, Smith, and Ho, Circuit Judges.

Patrick E. Higginbotham, Circuit Judge:

This case concerns whether an employer violated the Consolidated 

Omnibus Reconciliation Act of 1985 (“COBRA”)1

 when it failed to provide 

a retired employee notice of her right to continue her insurance coverage. 

This issue returns to this Court following a prior remand to the district court 

for further consideration of Kathran Randolph’s COBRA claims against the 

1

 29 U.S.C. § 1161 et seq.

United States Court of Appeals 

Fifth Circuit 

FILED 

November 30, 2021 

Lyle W. Cayce 

Clerk 

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2 

East Baton Rouge Parish School System (“EBRPSS”).2 We reverse the 

district court’s holding that no COBRA violation occurred; we affirm the 

district court’s denial of Randolph’s request for payment of her medical 

expenses; we remand the district court’s decision not to award statutory 

penalties or attorneys’ fees to Randolph; and we vacate the district court’s 

denial of Randolph’s motion to alter or amend judgment or for a new trial. 

I. 

Randolph was employed as a teacher and later as a principal by 

EBRPSS. During her employment, Randolph was enrolled in EBPRSS’s selffunded health insurance plan, which was administered by Blue Cross and 

Blue Shield of Louisiana. 

On September 4, 2014, Randolph was placed on paid administrative 

leave pending an investigation into a complaint against her. Randolph was 

taken off administrative leave on October 22, 2014, but Randolph used her 

sick leave to remain on paid leave. On August 13, 2015, Randolph was placed 

on unpaid leave after she exhausted her sick leave and other forms of leave. 

EBPRSS paid Randolph’s portion of her insurance premiums while she was 

on unpaid leave until her retirement. 

Randolph retired on February 15, 2016. A Blue Cross and Blue Shield 

of Louisiana report noted that her insurance coverage ended on February 29, 

2016. On August 23, 2016, Randolph’s insurer paid its final claim. On 

September 13, 2016, Randolph went to a doctor’s office and her coverage was 

denied. Shortly after this denial, Randolph spoke to Anita Williams, an 

EBRPSS Payroll and Benefits employee. Williams told Randolph that she 

owed $2,900 for back payments on missed insurance premiums and $480 per 

2

 See Randolph v. E. Baton Rouge Par. Sch. Sys., 774 F. App’x 861 (5th Cir. 2019) 

(per curiam).

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month going forward.3 Randolph received her first COBRA notice in a letter 

dated October 3, 2016. 

II. 

On October 5, 2015, Randolph filed suit under 42 U.S.C. § 1983, 

naming EBRPSS and EBRPSS officials as defendants. After she retired, 

Randolph also alleged a COBRA violation in an amended complaint filed on 

November 14, 2016. 

The district court granted summary judgment to EBRPSS and the 

other defendants on Randolph’s § 1983 claims. The district court did not 

substantially discuss the COBRA claim. Randolph appealed to this Court. 

We affirmed the district court’s grant of summary judgment with respect to 

the § 1983 claims and reversed and remanded for reconsideration of the 

COBRA claim.4

On remand, the district court ruled from the bench that neither 

Randolph’s placement on unpaid leave nor her retirement constituted a 

qualifying event triggering COBRA because neither change was accompanied 

by a loss of coverage. The district court ruled that Randolph was not entitled 

to statutory penalties, attorneys’ fees, or payment of medical bills. Randolph 

filed a Rule 59 motion for the district court to alter or amend the judgment or 

grant a new trial.5

 The district court denied that motion. Randolph timely 

appealed. 

3

 This number was either $480 or $490; it was not clearly established in the record 

below. 

4 Randolph, 774 F. App’x 861 (5th Cir. 2019). 

5

 FED. R. CIV. P. 59. 

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III. 

Following a bench trial, we review a district court’s findings of fact for 

clear error and its conclusions of law de novo.

6

 Factual findings are clearly 

erroneous when, although there is evidence to support the finding, the 

reviewing court on the entire evidence is left with the definite and firm 

conviction that a mistake has been committed.7

 The district court’s denial of 

Randolph’s requests for statutory penalties, attorneys’ fees, and payment of 

her medical bills are each reviewed for abuse of discretion.8

 The denial of 

Randolph’s Rule 59 motion is also reviewed for abuse of discretion.9

IV. 

Congress amended the Employment Retirement Income Security Act 

of 1974 (“ERISA”)10 with COBRA to create additional statutory rights, 

including the right to continue health insurance coverage after certain 

employment status changes. “The intent of Congress in enacting the 

COBRA amendments was to preserve employees’ medical insurance as they 

move from job to job and prevent the loss of insurance coverage that could 

accompany any changes in employment.”11 

6 Chemtech Royalty Assocs., L.P. v. United States, 766 F.3d 453, 460 (5th Cir. 2014). 

7 Providence Behav. Health v. Grant Rd. Pub. Util. Dist., 902 F.3d 448, 455 (5th Cir. 

2018). 

8 Wegner v. Standard Ins. Co., 129 F.3d 814, 820–21 (5th Cir. 1997); Godwin v. Sun 

Life Assur. Co. of Canada, 980 F.2d 323, 327 (5th Cir. 1992); Hager v. DBG Partners, Inc., 

903 F.3d 460, 470 (5th Cir. 2018). 

9 Rollins v. Home Depot USA, 8 F.4th 393, 396 (5th Cir. 2021). 

10 29 U.S.C. § 1001 et seq.

11 Lifecare Hosps., Inc. v. Health Plus of Louisiana, Inc., 418 F.3d 436, 441 (5th Cir. 

2005). 

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Under COBRA, qualified beneficiaries, including employees, are 

entitled to continue coverage following a qualifying event.12 A COBRA 

violation occurs when there is a qualifying event and no notice to the qualified 

beneficiary of their COBRA rights. 29 U.S.C. § 1163 provides a list of events, 

including a termination or reduction of hours, that constitute a qualifying 

event when they cause a loss of coverage.13 There must be a “but for” causal 

link between the qualifying event and the loss of coverage.14

A reduction of hours “occurs whenever there is a decrease in the 

hours that a covered employee is required to work or actually works, but only 

if the decrease is not accompanied by an immediate termination of 

employment.”15 A termination occurs when the employee actually stops 

working for the employer.16 The circumstances surrounding an employee’s 

termination or reduction of hours are irrelevant unless gross misconduct was 

involved, “it does not matter whether the employee voluntarily terminated 

or was discharged.”17

A loss of coverage occurs when an employee ceases “to be covered 

under the same terms and conditions as in effect immediately before the 

qualifying event.”18 However, “a loss of coverage need not occur 

immediately after the event, so long as the loss of coverage occurs before the 

12 29 U.S.C. §§ 1161, 1167(3)(B); Blue Cross & Blue Shield of Texas, Inc. v. Shalala, 

995 F.2d 70, 71 (5th Cir. 1993). 

13 29 U.S.C. § 1163. 

14 Id. 

15 26 C.F.R. § 54.4980B-4, A-1(e). 

16 Mlsna v. Unitel Communications, Inc., 41 F.3d 1124, 1128 (7th Cir. 1994). 

17 26 C.F.R. § 54.4980B-4, A-2; 29 U.S.C. § 1163(2). 

18 26 C.F.R. § 54.4980B-4, A-1(c). 

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end of the maximum coverage period.”19 The maximum coverage period is 

generally the 18 or 36 months following a qualifying event.20

Employers must notify plan administrators that a qualifying event 

occurred within 30 days of the qualifying event.21 Plan administrators are in 

turn required to notify covered employees of their COBRA rights within 14 

days of receiving notice from employers.22 Thus, employees should receive 

notice of their COBRA rights within 44 days of a qualifying event. Failure to 

provide notice constitutes a violation. 

Following a COBRA violation, qualified beneficiaries may bring civil 

actions to recover benefits under the health insurance plan and to seek relief 

including a civil penalty of $110 per day.23 Qualified beneficiaries bringing a 

civil action can also recover attorneys’ fees at the discretion of the court.24

V. 

Randolph argues that both her placement on unpaid leave and her 

retirement were qualifying events under § 1163. We affirm the district 

court’s holding that the placement on unpaid leave was not a qualifying 

event; we reverse the district court’s holding regarding Randolph’s 

retirement and find that her retirement was a qualifying event and insufficient 

notice was given following her retirement. 

19 Id. (internal citations omitted). 

20 29 U.S.C. § 1162(a)(2); Shalala, 995 F.2d at 71. 

21 29 U.S.C. § 1166(a)(2). 

22 29 U.S.C. § 1166(a)(4); 29 C.F.R. § 2590.606-4; Degruise v. Sprint Corp., 279 

F.3d 333, 336 (5th Cir. 2002). 

23 29 U.S.C. § 1132; 29 C.F.R. § 2575.502c–3. 

24 29 U.S.C. § 1132(g). 

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A. 

Randolph first argues that a qualifying event occurred when she was 

placed on unpaid leave on August 13, 2015. The district court correctly held 

that Randolph’s placement on unpaid leave was not a termination, but the 

district court failed to consider whether the placement on unpaid leave was a 

reduction of hours. Randolph’s placement on unpaid leave at the exhaustion 

of her sick leave was a reduction of hours, a potential § 1163 qualifying event, 

as her hours were effectively reduced to zero and her pay was terminated.25 

However, no loss of coverage was caused by this reduction of hours, 

so the placement on unpaid leave was not a qualifying event under COBRA.26

A loss of coverage occurs when the employee ceases “to be covered under 

the same terms and conditions as in effect immediately before the qualifying 

event.”27 Randolph’s placement on unpaid leave only affected her hours and 

pay. It did not alter the terms of her coverage; she was allowed to continue 

her health insurance at the same rate. While the placement on unpaid leave 

was a reduction of hours, it was not a qualifying event because it did not cause 

a loss of coverage. 

B. 

Randolph also argues that her retirement was a qualifying event. 

Randolph’s retirement was classified by EBRPSS as a separation of service 

and was a termination under § 1163. Retirements, as terminations, are among 

the changes in employment status that COBRA was intended to cover when 

the retirement causes a change in insurance coverage. When an employee 

25 See Gaskell v. Harvard Co-op Society, 3 F.3d 495, 498–501 (1st Cir. 1993) and

Morehouse v. Steak N Shake, 938 F.3d 814 (6th Cir. 2019). 

26 Morehouse, 938 F.3d at 819–21. 

27 26 C.F.R. § 54.4980B-4, A-1(c). 

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retires and, upon retirement, is required to pay an increased amount for the 

same health coverage that the employee had before retirement, the increase 

in the premium or contribution required for coverage is a loss of coverage and 

the retirement is a qualifying event.28 A loss of coverage is not necessarily 

when coverage ends; a loss of coverage occurs when the terms and conditions 

of coverage change. 

Randolph experienced a loss of coverage when she retired as she was 

no longer eligible to continue her health insurance at the same contribution 

level. Rather than paying approximately $200 per month as an employee, 

Randolph was required to pay $480 per month to continue coverage as a 

retiree. The district court correctly concluded that COBRA does not require 

that an employee be allowed to pay the same contribution rate.29 However, a 

change in the contribution level triggers the notice requirement.30 Employers 

may change an employee’s contribution rates for health insurance upon 

retirement, but the employer must provide a COBRA notice following such 

a change. 

The loss of coverage must be connected to the qualifying event by a 

“but for” causal link.31 But for her retirement, Randolph would have 

continued to be an employee and would have had been allowed to pay $200 

per month for health insurance. Once she retired, Randolph was no longer 

eligible to remain on the same plan at the same contribution rate. Because the 

retirement caused a loss of coverage, a qualifying event occurred. 

28 26 C.F.R. § 54.4980B-4, A-1(g), Example 2. 

29 29 U.S.C. § 1162(3) (permitting the new COBRA rate to be up to 102% of the 

applicable premium). 

30 26 C.F.R. § 54.4980B-4, A-1(c). 

31 29 U.S.C. § 1163. 

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C. 

The district court erred when it found that no qualifying event 

occurred because the § 1163 events were not contemporaneous with the loss 

of coverage. The district court held that “[t]here was no loss of coverage that 

occurred at the time that Ms. Randolph’s status became leave without pay or 

pending status in August of 2015” and “the retirement was likewise not a 

qualifying event because, again, there was no loss of coverage.” 

A loss of coverage does not need to be contemporaneous to the 

qualifying event. Regulations interpreting COBRA specifically state that “a 

loss of coverage need not occur immediately after the event, so long as the 

loss of coverage occurs before the end of the maximum coverage period.”32

29 C.F.R. § 2590.606-4(b) “requires notice if the termination occurs earlier 

than ‘the end of the maximum period of continuation coverage applicable to 

[the] qualifying event.’”33 Thus, the relevant question is whether a loss of 

coverage occurred within 18 months of a qualifying event.34 Here, the 

changes in the terms and conditions of Randolph’s coverage occurred within 

18 months of her retirement. 

D. 

Since a qualifying event occurred, the final question is whether proper 

notice was given. Randolph should have received notice within 44 days of the 

32 26 C.F.R. § 54.4980B-4, A-1(c). 

33 Hager, 903 F.3d at 467 (quoting 29 C.F.R. § 2590.606-4(b)). 

34 29 U.S.C. § 1162(2)(a). See also Gaskell, 3 F.3d at 499–501 (holding that the 

qualifying event need not be contemporaneous to the loss of coverage and that the 18 month 

continuation coverage period runs from the date of the qualifying event which triggers the 

loss of benefits). 

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qualifying event.35 The 44 days are measured from the qualifying event that 

eventually leads to coverage loss.36 Applied here, Randolph should have been 

given notice by the end of March 2016. Randolph did not receive a COBRA 

notice until October 3, 2016. A qualifying event occurred and caused a loss of 

coverage, and Randolph did not receive timely notice of her COBRA rights. 

Thus, there was a COBRA violation. 

VI. 

 Randolph sought three forms of relief: statutory penalties for 

delinquent notice, payment of her unpaid medical expenses, and attorneys’ 

fees. The district court did not grant any form of relief. We remand only to 

the extent that some of the relevant factors for deciding whether to grant 

relief have changed in light of this opinion. 

A. 

Courts have discretion to impose a penalty of $110 per day for a failure 

to meet COBRA notice requirement.37 We have offered district courts 

“limited guidance” as to what factors should be considered when deciding 

whether to impose sanctions.38 The purpose of penalty is to ensure that plan 

participants know where they stand with respect to their health insurance 

plan.39 Courts have found that the penalty is designed to be more punitive in 

nature rather than compensatory with the aim of inducing compliance by plan 

35 29 U.S.C. § 1166(a)(2); 29 U.S.C. § 1166(a)(4); 29 CFR § 2590.606-4(b)(1). 

36 29 U.S.C. § 1163; Gaskell, 3 F.3d at 499. 

37 29 U.S.C. § 1132(c)(1). 

38 Hager, 903 F.3d at 470. 

39 Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 118 (1989). 

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administrators.40 District courts have considered a number of factors in the 

decision to award or withhold statutory penalties, including: prejudice to the 

plaintiff, the availability of other remedies, bad faith or intentional conduct 

by the administrator, and the length of the delay.41 

The district court found “no evidence of any aggravating factors or 

bad faith that would warrant a discretionary or fact-specific finding of the 

statutory penalties.” Although the district court did not specify what 

“aggravating factors” it considered, the length of delay may have been one 

of them.42 Because we held that Randolph’s retirement in February 2016 was 

a qualifying event, the length of the delay has changed from what was 

considered by the district court. We remand the decision regarding statutory 

penalties to the district court for further consideration. 

B. 

Section 1132 also permits courts to “order such other relief as it deems 

proper.”43 District courts have interpreted this provision to enable plaintiffs 

to recover the cost of medical bills that the plaintiff paid in the absence of 

owed continuation coverage.44 This Court has recognized that district courts 

40 Hager, 903 F.3d at 471 (citing Scott v. Suncoast Beverage Sales, Ltd., 295 F.3d 1223, 

1232 (11th Cir. 2002) and Phillips v. Riverside, Inc., 796 F. Supp. 403, 411 (E.D. Ark. 1992)). 

41 See id. at 470–71. 

42 Id. at 470–71. 

43 29 U.S.C. § 1132(c)(1). 

44 See Sonnichsen v. Aries Marine Corp., 673 F. Supp. 2d 466, 474 (W.D. La. 2009) 

and Miles–Hickman, 589 F. Supp. 2d 849, 882 (S.D. Tex. 2008). See also Fisher v. Trutech, 

Inc., No. 5:04-CV-109, 2006 WL 3791977, at *3 (M.D. Ga. Nov. 17, 2006); Chenoweth v. 

Wal–Mart Stores, Inc., 159 F. Supp. 2d 1032, 1042 (S.D. Ohio 2001); Hamilton v. Mecca, 

Inc., 930 F. Supp. 1540, 1555 n.24 (S.D. Ga. 1996). 

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grant this form of relief and has not found it untoward.45 Plaintiffs’ recovery 

has been limited to “an amount equal to medical expenses minus deductibles 

and premiums that the beneficiary would have had to pay for COBRA 

coverage.”46 Where the total of monthly premiums a plaintiff would have 

owed under COBRA exceeds the medical costs incurred, district courts have 

found no damages are owed.47 

The district court determined EBRPSS continued to pay Randolph’s 

medical bills, making the total amount of unpaid medical bills less than the 

unpaid premiums. This factual finding presents no clear error. The district 

court did not abuse its discretion in denying Randolph’s request for unpaid 

medical expenses. We affirm the district court’s denial of Randolph’s request 

for payment of her medical expenses. 

C. 

In an ERISA proceeding, a court “in its discretion may allow a 

reasonable attorneys’ fee and costs of action to either party.”48 Wegner v. 

Standard Ins. Co. provides five factors to determine whether a court should 

grant attorneys’ fees.49 As a result of our decision, some of the Wegner factors 

likely shifted. Specifically, the fourth factors asks, “whether the parties 

requesting attorneys’ fees sought to benefit all participants and beneficiaries 

of an ERISA plan or to resolve a significant legal question regarding ERISA 

itself.”50 Randolph presented a significant legal question regarding the 

45 Hager, 903 F.3d at 471. 

46 Sonnichsen, 673 F. Supp. 2d at 474. 

47 Miles-Hickman, 589 F. Supp. 2d at 881–82. 

48 29 U.S.C. § 1132(g). 

49 129 F.3d at 821. 

50 Id.

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interpretation of the COBRA amendment to ERISA. The fifth Wegner factor 

asks a court to weigh the relative merits of the parties’ positions, which favor 

Randolph following a reversal. We therefore remand the district court’s 

denial of attorneys’ fees for further consideration. 

VII. 

 We REVERSE the district court’s ruling that no COBRA violation 

occurred. We AFFIRM the district court’s denial of Randolph’s request for 

payment of her medical expenses. We REMAND the issue of whether 

Randolph should be awarded the statutory penalty or attorneys’ fees for 

further consideration. We VACATE as moot the district court’s denial of 

Randolph’s Rule 59 motion. 

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