18.4 Procedural Issues

• Library: Employment Law in Virginia (Virginia CLE) (2020 Ed.)

18.4 PROCEDURAL ISSUES

18.401 In General. For ERISA plans, COBRA rights are enforced through equitable relief under ERISA procedures. ²⁰⁰ The PHSA allows aggrieved state and local employees to bring an action for the enforcement of their rights and "appropriate equitable relief." ²⁰¹

Where an arbitration clause in a severance plan did not expressly apply to COBRA claims, the court held that the former employee's COBRA claim was not covered by the arbitration clause. ²⁰²

18.402 Evidence. In Martin v. Ingersoll-Rand Co., ²⁰³ the court upheld the plan's denial of additional disability continuation coverage, holding that the plan administrator was not bound by the Social Security Administration's determination of disability status, which was "important evidence" but not determinative.

In Claudio-Gotay v. Becton Dickinson Caribe, Ltd., ²⁰⁴ the court found summary judgment was not warranted for the employer on the plaintiff's COBRA notice claim where the employer's evidence was a copy of a COBRA notification letter to the plaintiff and of a note dated several months later stating that the COBRA letter had been sent by certified mail with acknowledgement of receipt on the date of the letter. The court found this evidence did not compel the conclusion that the letter was actually mailed.

18.403 Exhaustion of Administrative Remedies. A qualified beneficiary generally must exhaust the plan's claims procedure before filing suit. ²⁰⁵

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18.404 Sovereign Immunity. In Bates v. Hess, ²⁰⁶ which was decided before Seminole Tribe v. Florida, ²⁰⁷ the court rejected government officials' defense of Eleventh Amendment immunity and qualified immunity.

18.405 Preemption. With respect to ERISA plans, COBRA preemption rules apply under 29 U.S.C. §§ 1144(a) and 1191. ²⁰⁸ Although the PHSA formerly had no express preemption provision, one court has stated that ERISA preemption applies with equal force under PHSA. ²⁰⁹ PPACA ²¹⁰ added preemption provisions to the PHSA similar to those in 29 U.S.C. § 1191, which are "construed to supersede any provision of state law which establishes . . . any standard or requirement solely relating to health insurance issuers in connection with group or individual health coverage except to the extent that such standard or requirement prevents the application of a requirement" of PPACA. ²¹¹

In State ex rel. Orlofske v. City of Wheeling, ²¹² the court ruled that the PHSA's 36-month limitation on the continuation of health care coverage does not preempt a West Virginia law providing for lifetime health care coverage for municipal employees and their spouses. The court reasoned that the PHSA does not contain an express preemption provision and would, therefore, preempt state law only if there were a conflict with federal law.

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In Perry v. FTData, Inc., ²¹³ the court held that ERISA preempts a Maryland law requiring employers to give employees notice of their right to continued health coverage following employment termination. Although the statute does not conflict with...