No Intentional Infliction Of Emotional Distress For Lapse Of COBRA Coverage Due To Mishandled Paperwork

CATEGORY: Client Update for Public Agencies, Private Education Matters, Public Education Matters
CLIENT TYPE: Private Education, Public Education, Public Employers
DATE: Sep 07, 2023

Allentown School District terminated administrator Joseph LiCausi’s employment on April 30, 2020.  As part of LiCausi’s lawsuit against the District for his termination, he filed a claim against the District’s Human Resources Director for intentional infliction of emotional distress (IIED) based on the termination of his health coverage under the District’s group health plan.

At the time of termination, the Human Resources Director (Director) notified LiCausi that he would be sending LiCausi a Consolidated Omnibus Budget Reconciliation Act (COBRA) notice about continuing health insurance.  The Director testified that he provided LiCausi with the COBRA notice in May 2020, while LiCausi claimed that he never received it.  The District’s health insurance provider Highmark Blue Shield (Blue Shield) informed LiCausi that his health coverage ended on April 1, 2020.  There was no clear explanation why Blue Shield ended coverage one month before LiCausi’s formal termination date of April 30, 2020.  Since LiCausi’s health insurance coverage ended April 1, 2020, there was a lapse in his health insurance coverage which occurred during the height of the COVID-19 pandemic.

An IIED claim requires evidence of intentional outrageous or extreme conduct by the defendant, which causes severe emotional distress to the plaintiff.  Additionally, a plaintiff must suffer some type of resulting physical harm due to the defendant’s outrageous conduct.  The U.S. District Court found LiCausi did not show that the Director’s conduct was outrageous.  Instead, the Director properly notified LiCausi of his right to COBRA when it notified him of termination.  The Director testified that he did not direct Blue Shield to terminate LiCausi’s health insurance.  The Director also testified that his office sent COBRA information to LiCausi in May 2020.

The District Court stated that at most, LiCausi showed that the Director was not diligent in his efforts to ensure LiCausi was able to maintain health insurance coverage under COBRA.  However, the failure to follow-up on health insurance paperwork was not so outrageous or extreme to meet the standard required for IIED.  The District Court granted summary judgment in favor of the Director and District on this claim.

LiCausi v. Allentown School Dist., et al., 2023 WL 4471686 (E.D. Pa. 2023).

Note: This case serves as a reminder for employers to timely provide COBRA notices to employees and former employees who lose employer-sponsored health coverage due to a qualifying event.  Employers are encouraged to keep a clear records of when COBRA notices were sent out to document compliance with COBRA requirements.

View More News

Client Update for Public Agencies
New 2024 Deduction Limitation For Health Savings Accounts
Client Update for Public Agencies, Public Education Matters
LCW Partner Adrianna Guzman And Associate Attorney Gabriella Kamran Win Early Dismissal Of A PERB Charge