Opinion ID: 677894
Heading Depth: 1
Heading Rank: 4

Heading: Obligations under COBRA

Text: 18 Under the Consolidated Omnibus Budget Reconciliation Act of 1985, 5 ERISA plan sponsors are required to provide terminated employees and their dependents with the option of purchasing the continuation of their health coverage without regard to insurability. 6 See Coble v. Bonita House, Inc., 789 F.Supp. 320, 321-23 (N.D.Cal.1992) (discussing plan sponsor's obligations under COBRA); Johnson v. Reserve Life Ins. Co., 765 F.Supp. 1478 (C.D.Cal.1991) (same). Here, the district court found that Burdick Painting's termination of its status as a union employer did not constitute a statutorily-enumerated event that qualified the DeVolls for COBRA benefits. In the alternative, the court found that Burdick Painting was exempt from the requirements of COBRA because it employed fewer than twenty employees during 1990. See 29 U.S.C. Sec. 1161(b); Krogh v. Chamberlain, 708 F.Supp. 1235, 1239 (D.Utah 1989). The DeVolls contest both these findings. 19 The district court correctly determined that the DeVolls were not entitled to continuation coverage. COBRA Sec. 603 specifically enumerates six qualifying events that trigger continuation coverage, none of which apply here. 29 U.S.C. Sec. 1163. The DeVolls claim that the termination of Burdick Painting's union status falls under the second qualifying event listed under the statute: The termination (other than by reason of such employee's gross misconduct), or reduction of hours, of the covered employee's employment. 29 U.S.C. Sec. 1163(2). However, the provision's plain language does not include a switch from union to nonunion employment, and the appellants have cited no authority to the contrary. 7 20 The DeVolls admit that Burdick urged Robert to enroll in the Kaiser health insurance plan on several occasions. Consequently, for us to hold that a switch from union to nonunion employment constitutes a qualifying event under COBRA would contradict the plain language of Sec. 602, which allows an employer to alter coverage under a plan so long as the coverage is modified in the same manner for all similarly situated beneficiaries. 29 U.S.C. Sec. 1162(1). Burdick Painting's change from the Fund to Kaiser was not prohibited so long as all similarly situated beneficiaries received the same coverage. Furthermore, because Burdick Painting continued to provide its employees with medical benefits after it became a nonunion employer, an exaggerated interpretation of termination of employment in this case is not mandated by the policy behind COBRA. 8 Thus, the DeVolls' claim that they were entitled to continuation coverage is meritless. 21 As we find that no COBRA-qualifying event occurred, we express no opinion on the district court's alternative finding that Burdick Painting was exempt from the requirements of COBRA because it employed fewer than twenty employees during 1990. 22