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In Sixth Circuit, a Change in Contribution Payment Methods under a Group Health Plan is not a Loss of Coverage under COBRA

In Morehouse v. Steak N Shake, the U.S. Court of Appeals for the Sixth Circuit (the “Sixth Circuit” or “Circuit Court”) reversed a federal district court’s prior holding that a change in contribution payment methods under a group health plan constitutes a loss of coverage under COBRA. The plaintiff was a participant in Steak N Shake’s (“SNS”) group health plan when she sustained a work-related injury. Due to her injury, she took a leave of absence (and thus incurred a reduction in her work hours) and began receiving workers’ compensation benefits. Because the participant was not receiving her usual salary from SNS, SNS instead deducted her contributions toward her plan coverage from her workers’ compensation checks. When the participant’s workers’ compensation payments terminated, SNS informed her that she must continue to pay her required plan contributions out-of-pocket in order to continue her coverage under the plan. When she did not… Continue Reading

May 2020
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