Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

The Employee Benefits blog has a terrific post this week explaining the "Gross Misconduct" rule for COBRA Coverage.

For those unfamiliar with the lingo, The Consolidated Omnibus Budget Reconciliation Act (COBRA) (among other aspects) describes rights that employees have to continue their health insurance after their employment as been terminated (and for some other reasons too).    But there is an exception: When the employee is terminated for "gross misconduct", the benefits cease.  What does that mean? Well, the Act doesn't define it.

But the Employee Benefit blog shares some insight from one case about what it means. 

Three things are very important about this decision.  First, the court did not find that any “criminal” conduct was required to meet the “gross misconduct” definition.  Gross misconduct can be an intentional, deliberate, extreme and outrageous that “shocks the conscience.”  It can be “reckless or in deliberate indifference to an employer’s interests.”  ...

Second, the employer has the burden of establishing the termination was for “gross misconduct.”  ... It must be the primary reason, not one of many.

Finally, the employee and potential COBRA beneficiaries have to be notified of the determination that COBRA is not being offered because of the termination for gross misconduct.  

So what's an employer to do? The blog suggests some thoughts, but I'll share some general observations as well.

1. Document, document, document.  If an employer is going to claim "gross misconduct", there ought to be ample documentation supporting the decision.

2. Make sure the termination documents reflect the actual reason and the reason amounts to "gross misconduct".  Meeting this standard is difficult and courts will understandably look to any reason to deny it. Having a letter of termination that merely states the employee was let go for "performance" reasons, isn't going to cut it. 

3. Follow policies and COBRA to the letter. The requirements, for example, about notification under COBRA are strict. Missing deadlines or not providing information may provide the escape hatch that might not be available otherwise.

And as always, seek some legal guidance on this. Denying COBRA nowadays is rare; if an employer does try to use that provision, it can be assured that a fight about coverage may not be too far behind.

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What's the latest trend that human resources departments are using to control costs? According to a Business Week article in this week's issue, it's "Dependent Eligibility Audits".  What are they? The article explains:

Dependent eligibility audits," in which companies demand proof that spouses and children qualify for medical benefits, are swiftly becoming both fashionable and financially rewarding for companies frantic to curb the runaway costs of health coverage. Companies such as Boeing, General Motors, and American Airlines have been asking workers to send in marriage licenses, birth certificates, student IDs, and tax returns. The goal: to cull the benefits rolls of ineligibles, which could include ex-spouses, stepchildren who live elsewhere, or 29-year-old college grads still being claimed as dependents.

While this may appear to simply be a "benefit" issue, some companies are taking this issue serious, including firing some employees, according to the article.

At many companies, missing the deadline for sending in paperwork risks having a dependent's coverage dropped. Still, there are usually appeal windows of up to 60 days during which coverage can be reinstated if employees show proof. A few companies, however, are getting tough on those who procrastinate or are caught signing up an unqualified person. Some have made employees wait until the next open enrollment period before reinstating insurance if they repeatedly missed deadlines. [One consultant] said one client even fired workers discovered to have enrolled ineligible people because they violated its stringent code of conduct.

While such audits would, at first glance, appear to implicate privacy concerns, employees seeking benefits from a company routinely have to provide information on their dependents anyways. The risks in conducting the audit therefore have to do more with perceptions and managing employees, rather than privacy concerns. 

For the HR professionals there, feel free to post your experiences, if any, with such audits and whether this is indeed, a developing trend.

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A few posts this week caught my eye:

• First, the HR Carnival has a great post this week about various HR issues, including how to train managers better.  And, best yet, you'll find a link back to this blog.  Thanks to the writers of the Carnival for the reference.
  
• Kris Dunn, over at HR Captialist,  has an interesting post about how HR professionals can help their companies keep benefit costs down. As Kris says, "If You Don't Have a Meaningful Answer to this Question From Your CEO, Update Your Resume..."
  
• Evil HR Lady, has an informative post as to how employers can prepare for terminations and how to educate managers about the right ways to do so.
  
• Workplace Horizons has been right on top of the Congress' consideration of ENDA, the Employment Non-Discrimination Act.  Near daily updates about the rumors of various amendments have been going up and its a useful site to keep track of certain pieces of legislation. 
  
• And finally, The Employment Blawg has been posting a series of hypotheticals on different workplace situations including violence, workplace and overtime.  As stated on the blog "Read Trucks and Guns: An Employment Law Fable, Part I (Overtime for Truck Drivers) for the whole story. . . . It ends with an HR manager getting shot by the driver (just hypothetically)."

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