WORKER’S OUTRAGEOUS BEHAVIOR COSTS HIM HIS JOB — AND HIS INSURANCE
QUESTION: Last month, we fired a member of our sales team after a Zoom meeting in which, while obviously severely intoxicated, he propositioned a client and called her an X-rated word when she turned him down, before the host was able to shut him off. He now insists we offer him COBRA coverage, because he’s heard we have to pay for it. I thought we didn’t have to offer COBRA to employees who are fired for misconduct.
ANSWER: Generally, an employer with at least 20 employees must offer a temporary continuation of group health insurance coverage to a qualified worker who has been terminated, whether the employee quit, was laid off, or was fired. In normal times, the employee is required to pay for the continued coverage, but at the group rate paid by the employer (in theory, this should be a savings). Employees opting for continued health insurance must foot the bill for the total cost of the coverage: The portion they paid plus, the amount paid by their employer, plus a 2 percent fee. The amount can be eye-popping — one writer reported paying $2,700 per month for continuation coverage for two people in their 30s.
But workers laid off this year may be eligible to get COBRA coverage for free. Under the American Rescue Plan Act, signed into law by President Joe Biden on March 11, 2021, employers are required to pay 100 percent of a qualified employee’s continuation premium from April 1, 2021 to September 30, 2021.
Qualified workers must be notified of their right to choose continued coverage through COBRA (the acronym stands for Consolidated Omnibus Budget Reconciliation Act) within 44 days after the “qualifying event” (the layoff or other termination). The former employee then has at least 60 days to decide whether or not to choose coverage. Employees who are separated from employment, or whose hours are reduced resulting in a loss of coverage, are qualified for COBRA if they were enrolled in a company-sponsored group health insurance plan on the day before the “qualifying event,” and the insurance plan was in effect on more than half the employer’s business days in the previous calendar year.
A worker who is terminated for gross misconduct, however, is not viewed as “qualified.” COBRA does not define what constitutes “gross misconduct,” so the term is largely defined by the courts. One court has stated it is conduct “so outrageous that it shocks the conscience;” another defined it as “misconduct beyond mere minor breaches of employee standards, but conduct that would be considered gross in nature,” and yet another described it as “carelessness or negligence of such a degree or recurrence as … to show an intentional and substantial disregard of the employer’s interests or the employees [sic] duties and obligations to his employer.”
Some examples of gross misconduct? An executive who brutally assaulted an employee, with whom he was having a relationship, sending her to the hospital for five days (and earning him a felony charge); an intoxicated employee who took a company car on a joy ride; a manager who misappropriated company funds; and an airline employee who shouted a racial slur and then lobbed an apple at a co-worker. But, a court found no “gross misconduct” where a nurse told a patient to wait in examination room for 30 minutes after receiving an injection, and then forgot about the patient and left for the day — finding that this was a single incident of negligence.
Based on these examples, it would seem that your employee’s drunken behavior at a business meeting is “gross misconduct,” and he has lost his right to COBRA continuation coverage.
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By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN LEGAL PLLC
900 Wilshire Drive, Suite 104
Troy, MI 48084
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