McDowell v. Krawchison
125 F.3d 954 (6th Cir. 1997)

Facts:

  • McDowell worked at the Winton Road Chiropractic Center.
  • Winton Road was one of many clinics owned by John Krawchison.
  • The clinics provided health insurance to their employees.
  • Dr. Dennis Anderson bought the clinic from Krawchison and fired McDowell.
  • McDowell signed a release, waiving all claims related to his employment.
  • There was also some discussion about a continuation of the benefits.
  • McDowell’s wife, Sidovar, had breast cancer. When she sought pre-approval for medical treatment about nine months after McDowell’s termination, she learned that she didn’t have insurance coverage.
  • McDowell and Sidovar then filed suit against Krawchison and Winton Road alleging violation of the Consolidated Omnibus Budget Reconciliation Act (COBRA) in addition to several state claims.

History:
The district court ruled in favor of the plaintiffs against both defendants.

Issues:
(1) COBRA notice.
(2) The effect of the release.

Holding:
Affirmed.

Reasoning:

(1) COBRA notice.

  • COBRA imposes a statutory requirement that a plan administrator notify “any qualified beneficiary” of his or her right to continue health insurance coverage for up to eighteen months after a “qualifying event” (i.e., termination).
    • “Qualified beneficiary” includes the spouse of a covered employee.
    • If the administrator fails to provide that notice to the qualified beneficiary, it may be bound to provide coverage to her.
  • Here, the court held that even if the notice to McDowell was legally sufficient, it did not meet the statutory requirement as to Sidovar.
    • She was entitled by statute to her own notice of her rights.
    • “A covered spouse has his or her own rights under COBRA, which are not dependent on the covered employee’s rights. For example, a covered spouse might choose to elect coverage while the covered employee does not, or they might choose different plans.”

(2) The effect of the release.

  • The release signed by McDowell could not have waived Sidovar’s COBRA rights.
  • “Her rights were in no way contingent on McDowell’s.Therefore, even if McDowell did waive his COBRA rights, he did not-and could not-waive Sidovar’s.”