Gaskell v. The Harvard

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 93-1024

                    DAVID AND CAROLYN GASKELL,

                     Plaintiffs, Appellants,

                                v.

             THE HARVARD COOPERATIVE SOCIETY, ET AL.,

                      Defendants, Appellees.

                                           

No. 93-1102

                    DAVID AND CAROLYN GASKELL,

                      Plaintiffs, Appellees,

                                v.

             THE HARVARD COOPERATIVE SOCIETY, ET AL.,

                     Defendants, Appellants.
                                           

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Edward F. Harrington, U.S. District Judge]
                                                        
                                           

                              Before

                    Torruella, Oakes* and Cyr,

                         Circuit Judges.
                                       

                                           

                  

*Of the Second Circuit, sitting by designation.

  Norman H. Jackman with  whom Martha M. Wishart and Jackman &  Roth
                                                                    
were on brief for plaintiffs.
  Francis  J. Lawler with  whom Robert  M. Shea and  Peabody & Brown
                                                                    
were on brief for defendants.

                                           

                         August 25, 1993
                                           

                                2

          CYR, Circuit Judge.   This case presents several impor-
          CYR, Circuit Judge.
                            

tant issues relating to group health plan "continuation coverage"

under  the  Employment Retirement  Income  Security  Act of  1974

("ERISA"), 29 U.S.C.   1001 et seq., as amended by the Comprehen-
                                   

sive Omnibus  Budget Reconciliation  Act of 1985  ("COBRA"), P.L.

99-272,  100 Stat.  222 (1986).   The  district court  ruled that

plaintiff  Carolyn  Gaskell,  wife  of  "covered  employee" David

Gaskell, was entitled to three years' continuation coverage under

COBRA, dating from her election of continuation coverage under an

ERISA employer-sponsored group health  insurance plan.  The court

denied a related subrogation claim brought by the Gaskells in the

name  of their  current  insurer.   The  district court  rejected

plaintiffs' requests for  statutory penalties, punitive  damages,

and attorney fees.

                                I

                            BACKGROUND
                                      

          David Gaskell  was a  longtime employee of  the Harvard

Cooperative  Society  ("Coop"), which  provided Blue  Cross group

medical plan coverage for  its employees and their families.   On

January 14,  1987, David  went on  full disability  leave, during

which he received full salary and benefits, including Blue  Cross

group plan coverage  for himself and Carolyn,  apparently at Coop

expense.  More  than a  year later, on  February 29, 1988,  still

unable to work,  David terminated his  employment with the  Coop,

                                3

retroactive to January 14, 1988.

          Under COBRA,  an employer that sponsors  a group health

insurance  plan  must offer  employees and  "qualified beneficia-

ries," including spouses and dependent children,  the opportunity

to continue their health insurance  coverage, at group rates  but

at  their own  expense, for  at least  eighteen months  after the

occurrence of a  "qualifying event"  and notice  to the  affected

employee.  See  29 U.S.C.    1161-68.  A  "qualifying event"  in-
              

cludes  a  "termination . . .  , or  reduction  of hours,  of the

covered employee's employment"  which, "but for the  continuation

coverage under this part, would result in the loss of coverage of

a  qualified beneficiary."   Id.  at   1163(2).   In  April 1988,
                                

following  David's  resignation, the  Coop  sent  a COBRA  notice

informing him of his  statutory right to continue his  Blue Cross

group plan coverage for  eighteen months, beginning July 1, 1988.

On  April 26, 1988,  David  elected  "continuation coverage"  for

himself and Carolyn.

          Within a  year, the  Gaskells learned that  David would

become  eligible for  Medicare  benefits beginning  July 1, 1989.

Although Medicare eligibility  would render David  ineligible for

"continuation coverage" after July 1,  1989, see id. at   1162(2)
                                                    

(D)(ii), it also would serve as a new "qualifying event," see id.
                                                                 

at   1163(4), and make Carolyn eligible for three years' "contin-
                              

uation coverage" under the  Coop group plan with Blue Cross.  See
                                                                 

id.  at   1162(2)(A)(ii).  At  about the same  time, however, the
   

Gaskells learned  that the  Coop intended to  terminate its  Blue

                                4

Cross group plan and adopt a self-funded insurance plan  adminis-

tered by Benefit Plans Northeast ("BPN"), effective July 1, 1989.

As the  new BPN-administered plan  would not be  "convertible" to

individual coverage at the end of Carolyn's continuation coverage

period,  the  Gaskells  decided  to  exercise  their  "conversion

option"  under the Coop Blue  Cross group plan.   Accordingly, in

June 1989, prior to  the changeover in Coop  plan administration,

the Gaskells asked  the Coop to "convert" Carolyn's  group cover-

age, effective  July 1,  to individual direct-pay  coverage under

the Blue Cross Managed Major Medical Plan.

          The  coincidence  of   David's  Medicare   eligibility,

Carolyn's application for conversion to an individual policy, and

the Coop's change to  a self-funded plan, engendered considerable

confusion among  the  parties.   On August 30,  1989, Blue  Cross

began returning the Gaskells'  medical bills unpaid.  Blue  Cross

contended that its obligation  to provide Carolyn with individual

direct-pay coverage had terminated on June 30, 1989, concurrently

with  the expiration of its group plan arrangement with the Coop,

and  that any  Blue  Cross coverage  beyond  that date  would  be

available  only on the terms  imposed on new  applicants, viz., a
                                                              

240-day waiting  period and an exclusion  for preexisting medical

conditions.    Finding  these terms  unacceptable,  the  Gaskells

sought to continue Carolyn's coverage under the  Coop group plan,

then  being administered by BPN.  BPN refused, asserting that the

Coop's  obligation to provide  "continuation coverage" had termi-

nated  before the  change in  plan  administration took  place on

                                5

July 1,  1989.   After  several  unsuccessful  efforts to  obtain

satisfactory coverage,  the Gaskells  brought the  present action

against the  Coop, BPN,  James Argeros (Coop  president), Leonard

Cutler (BPN  president), and  Blue Cross, alleging  violations of

COBRA and Massachusetts law.1

          On  January 31, 1991, the Gaskells settled their claims

against Blue Cross, in return for,  inter alia, individual cover-
                                              

age for Carolyn under  the Blue Cross Managed Major  Medical Plan

retroactive  to  July 1,  1989.   The  retroactive  coverage  was

subject to a twenty percent co-payment.   As part of the  settle-

ment,  Blue Cross  assigned the  Gaskells its  subrogation rights

against  the remaining  defendants.   The  Gaskells then  amended

their complaint to add  a subrogation claim against the  Coop and

BPN, relating to the eighty percent of Carolyn's medical expenses

which Blue Cross had paid under the terms of Carolyn's individual

Blue Cross policy.

          On May 17, 1991,  acting on cross-motions for  judgment

on the  pleadings, the district court ruled that BPN and the Coop

were legally responsible under COBRA for providing  "continuation

coverage" of Carolyn's medical  expenses between July 1, 1989 and

July 1, 1991.    The  court  rejected the  Gaskells'  demand  for

"extra-contractual"  damages, and limited compensatory damages to

the twenty percent co-payment amount not retroactively covered by

Carolyn's individual  Blue Cross policy, at the same time reserv-

                    

     1The Gaskells  later waived their  state-law claims  against
all defendants.

                                6

ing decision on their subrogation claim for the remaining  eighty

percent of  Carolyn's medical expenses.   See Gaskell  v. Harvard
                                                                 

Cooperative Soc'y, 762 F.  Supp. 1539, 1543-1544 & n.8  (D. Mass.
                 

1991).  Shortly thereafter, in an unpublished order, the district

court  granted summary  judgment  against the  Gaskells on  their

subrogation claim,  ruling that  Blue Cross "possessed  no rights

pursuant  to the  Subscriber Certificate  against [the  Coop] for

reimbursement  of any  monies  paid  towards [Carolyn's]  medical

bills."  The  individual claims against Leonard  Cutler, as "plan

administrator," were  dismissed on October 6, 1992.   The parties

stipulated to the  dismissal of the remaining  count against BPN,

and final judgment was entered on December 14, 1992.  This appeal

followed.

                                II

                            DISCUSSION
                                      

Standards of Review
                   

          We review a  grant of summary judgment de novo, employ-
                                                        

ing the same  criteria incumbent  upon the district  court.   See
                                                                 

Vanhaaren v. State  Farm Mut. Auto. Ins. Co., 989  F.2d 1, 3 (1st
                                            

Cir. 1993); High  Voltage Eng'g  Corp. v. Federal  Ins. Co.,  981
                                                           

F.2d 596, 598 (1st Cir. 1992); Pedraza v. Shell Oil Co., 942 F.2d
                                                       

48,  50  (1st Cir.  1991), cert.  denied,  112 S.Ct.  993 (1992).
                                        

Summary judgment  is appropriate  where  "the pleadings,  deposi-

tions,  answers  to  interrogatories,  and  admissions  on  file,

together  with  the affidavits,  if any,  show  that there  is no

genuine issue as to any material  fact and that the moving  party

                                7

is entitled  to judgment as a  matter of law."   Fed. R.  Civ. P.

56(c); see Vanhaaren, 989  F.2d at 3; Canal  Ins. Co. v.  Benner,
                                                                

980 F.2d 23, 25 (1st Cir. 1992).  Similarly, on plenary review of

a  district court judgment on the pleadings under Rule 12(c), all

material allegations in the complaint  are credited in the  light

most favorable to the  plaintiff, see International Paper Co.  v.
                                                             

Jay,  928 F.2d  480, 482  (1st Cir.  1991).   A dismissal  on the
   

pleadings will be upheld  only if "'it appears beyond  doubt that

the plaintiff  can prove  no  set of  facts in  support of  [its]

claims  which  would entitle  [it] to  relief.'"   Id.  at 482-83
                                                      

(quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).
                         

Statutory Background
                    

          COBRA was enacted in 1986, as a legislative response to

"reports of the  growing number of  Americans without any  health

insurance coverage and the decreasing willingness of our Nation's

hospitals to provide  care to  those who cannot  afford to  pay,"

H.R.   Rep. No. 241, 99th  Cong., 2d Sess. 44,  reprinted in 1986
                                                            

U.S.C.C.A.N. 579,  622.2   In  "an  effort to  provide  continued

                    

     2Although COBRA  has been amended several  times, see, e.g.,
                                                                
Tax Reform Act of  1986, P.L. 99-514 (October 22,  1986),   1895-
(d); Technical and Miscellaneous Revenues Act of 1988,  P.L. 100-
647 (November 10, 1988),   3011(a); and Omnibus Budget Reconcili-
ation  Act of  1989 ("OBRA"),  P.L. 101-239  (December 19, 1989),
   6703-6710, 6801,  7862(c), 7891(d), except  as otherwise indi-
cated we refer to the January, 1987 version as "COBRA."
     For a fuller description of COBRA's enactment, see Thomas H.
Somers, COBRA: An Incremental  Approach to National Health Insur-
                                                                 
ance, 5 J. Contemp. Health L.  & Probs. 141, 141-2 (1992) (noting
    
that  COBRA's "continuation  coverage"  provisions  were  enacted
"without  deliberation  . .  . ,  in  the process  amending three
distinct statutes,"  and "invit[ing] a fair  amount of regulatory
confusion.").

                                8

access to  affordable private health insurance for  some of these

individuals," H.R.  Rep. No. 241,  at 44, without  increasing the

"staggering budget deficits now facing the United States," see S.
                                                              

Rep.  No. 146, 99th Cong., 2nd Sess. 3, reprinted in 1986 U.S.C.-
                                                    

C.A.N. 42, 43, COBRA compels employers that sponsor certain group

health plans to provide "qualified beneficiaries" with the option

of receiving  self-paid "continuation coverage," at  no more than

102%  of group rates, for eighteen or thirty-six months after the

occurrence of  a "qualifying event" which  would otherwise result

in  a termination of coverage.  See 29 U.S.C.   1161(a), 1162(2)-
                                   

(A).3

          The "continuation  coverage" required by  COBRA must be

"identical  to the coverage provided  under the plan to similarly

situated beneficiaries  under  the plan  with respect  to whom  a

qualifying  event has  not  occurred," 29  U.S.C.   1162(1),  and

"[i]f  coverage is  modified  under the  plan  for any  group  of

similarly  situated  beneficiaries, such  coverage shall  also be

modified in the same manner for all individuals who are qualified

beneficiaries under the  plan pursuant to  [COBRA] . . . ."   Id.
                                                                 

An employer which fails  to provide elective "continuation cover-

age" under the terms of the statute is subject to unfavorable tax

                    

     3The period of entitlement to "continuation coverage" may be
extended  or shortened,  depending on  the occurrence  of certain
events  within the preceding coverage term.  See, e.g., 29 U.S.C.
                                                      
  1162(2)(A)(ii)  (occurrence  of  additional  qualifying  event,
within initial period of "continuation coverage," may extend term
of COBRA  coverage); id.  at   1162(2)(A)(v)  (covered employee's
                        
eligibility for "continuation coverage" terminates  with Medicare
eligibility).

                                9

treatment,  see  26 U.S.C.    4980B  (1989),  amending 26  U.S.C.
                                                      

  162(i)(2)  (1988), and  to  civil suit  by affected  "qualified

beneficiaries," see  29 U.S.C.    1132(a).  A  plan administrator
                   

which  fails to  provide  a "qualified  beneficiary" with  timely

notice of her rights under COBRA is subject to personal liability

not  exceeding $100  per day.   See  29 U.S.C.    1132(c)(1); see
                                                                 

generally Jeffrey  D. Mamorsky, Employee Benefits  Law: ERISA and
                                                                 

Beyond,   10.07  et  seq. (2d  ed.  1993) (discussing  COBRA  and
                         

subsequent amendments).

The Gaskells' Coverage
                      

          The Coop does not  contest its obligation, under COBRA,

to provide  the Gaskells  with "continuation coverage,"  at their

election  and expense, for a minimum of eighteen months after the

occurrence  of a "qualifying event."  See  762 F. Supp. at 1541. 
                                         

Instead, the  Coop contends that the  relevant "qualifying event"

occurred on  January 14, 1987, when  David Gaskell first  went on

full  disability leave, "reducing his  hours" from forty per week

to zero.   See 29 U.S.C.   1163 ("reduction of hours . . . of the
              

covered  employee's employment"  as potential  qualifying event).

On the Coop's reasoning, therefore, its eighteen-month "continua-

tion  coverage" obligation expired on July 14, 1988, and the Coop

had no legal duty to continue Carolyn's coverage further based on

David's  subsequent Medicare  eligibility  on July 1,  1989.   We

agree with the Coop's reading of  the statute, but find no record

evidence  to  support its  allegation  that  group plan  coverage

terminated as a result of David's disability leave on January 14,

                                10

1987.   Accordingly, we must  remand for further  fact finding on

this issue.

          Under COBRA, "the  term 'qualifying event' means,  with

respect to any covered employee, any . . . [termination or reduc-

tion in hours] which, but for the  continuation coverage required
                                                                 

under  this part,  would  result in  the  loss of  coverage of  a
                                                                 

qualified   beneficiary . . . ."    29  U.S.C.    1163  (emphasis
                       

added).   As the district court  noted, see 762 F.Supp.  at 1542,
                                           

this statutory language offers  no explicit guidance in determin-

ing  the  relevant "qualifying  event"  where, as  here,  the em-

ployee's termination or reduction in hours does not coincide with

the  "loss  of coverage"  under the  employer's  plan.   In these

circumstances, the district court elected to view the "qualifying

event" as "the point at which [the employee] experience[d] a loss
                                                                 

of coverage as a consequence of  the reduction in hours."  Id. at
                                                              

1543 (emphasis added).  Other courts,  by contrast, have measured

the  eighteen-month  period  from  the event  itself,  viz.,  the
                                                           

employee's termination  or reduction  in hours,  so long  as that

event "eventually resulted in the loss of . . . health coverage."
                 

See, e.g., Phillips  v. Riverside,  Inc., 796 F.  Supp. 403,  411
                                        

(E.D. Ark.  1992) (holding that employer's "gratuitous" provision

of  three months'  continued  coverage must  be credited  towards

employer's eighteen-month COBRA  "continuation coverage"  obliga-

tion once belated  notice has  been given to  the employee);  see
                                                                 

also  Hubicki v. Amtrak Nat.  Passenger R. Co.,  808 F.Supp. 192,
                                              

197 (E.D.N.Y. 1992) (noting, without resolving, possible alterna-

                                11

tive readings of statute).

          Since  we agree  with  the district  court that  either

reading is plausible, based on the statutory language, we consult

the  available legislative history.   See Concrete Pipe & Prods.,
                                                                 

Inc. v. Construction Laborers Pension Trust, 113 S.Ct. 2264, 2281
                                           

(1993)  ("we turn, as . . . in  the usual case of textual ambigu-

ity, to the legislative purpose as revealed by the history of the

statute");  United States  v.  Alky Enterprises,  Inc., 969  F.2d
                                                      

1309, 1314  (1st Cir. 1992) ("where the  language of a statute is

ambiguous  on its face, we  should look . . .  to the legislative

history in order to  ascertain Congressional intent"); see gener-
                                                                 

ally Stephen J.  Breyer, On  The Uses of  Legislative History  in
                                                                 

Interpreting Statutes, 65  S. Cal. L. Rev. 845 (1992) (discussing
                     

proper use of legislative  history in ascertaining  congressional

intent where statute is  ambiguous).  COBRA's legislative history

leads us to conclude  that Congress intended an  employee's eigh-

teen-month period  of continuation coverage to  commence with the
                                                                 

event leading,  under the terms of the plan, to loss of coverage,
                                                                

rather than upon the loss of coverage itself.

          First, while the House Reports accompanying the various

versions  of the statute are  silent or ambiguous  on the issue,4

the  "continuation coverage"  provisions in  the House  bill were

                    

     4See  H.R.   Rep.  No. 241,  99th Cong.,  2d  Sess. 44,  45,
         
reprinted  in 1986  U.S.C.C.A.N.  579, 622-23  (no discussion  of
             
issue); H.R. Rep. No. 320, 99th Cong., 2d Sess. 319-20, reprinted
                                                                 
in 1986  U.S.C.C.A.N. 756, 970-71  (noting, without  elaboration,
  
that   1163 "defines qualifying event").

                                12

incorporated virtually  without change into the  final Conference

bill,5  and the  Report of  the Senate  Finance Committee,  which

accompanied the final Conference version, is reasonably explicit.

It provides, in pertinent part, that:

          Th[e] 18-month period [of continuation cover-
          age] includes, and is not in addition to, any
          continuation period presently permitted under
          local law.   Thus,  for example, if  the plan
          presently  provides  that dependent  coverage
          ceases  one month  after the  date of  an em-
          ployee's  death, the bill  would require that
          beneficiaries be entitled  to elect  continu-
          ation coverage for up  to 18 months following
          the  date of  death, not the  18-month period
          beginning with the actual cessation of cover-
          age one month after the employee's death.

See S.  Rep. No. 146, 99th  Cong., 2d Sess. 3,  365, reprinted at
                                                                 

1986 U.S.C.C.A.N. 42, 324.  We perceive no basis, in the legisla-

tive  history,  for the  Gaskells'  proposed  distinction between

"blended"  coverage  and  "stacked"  coverage.6    Moreover,  the

Senate Finance  Committee Report, referring  to "any continuation
                                                    

period presently permitted," see id. (emphasis added), appears to
                                    

undermine the basis for such a distinction.

          Second, the Proposed Regulations issued by the Treasury

Department, the only administrative interpretation of the statute

                    

     5Compare  Pub.L. 99-272    10001-02 with H.R. Conf. Rep. No.
                                             
99-543,  at 162-72 (text of  H.R. 3128,     10001-02 (rejected by
the House, December 19, 1985)).

     6As explained in  the Gaskells' appellate  brief, "blending"
of  coverage  occurs when  "the employer  wishes  to pay  for the
employee's coverage for part  or all of the COBRA  period," after
giving  timely  notice to  the employee  of  the occurrence  of a
qualifying  event.    "Stacking"  of coverage  occurs  "when  the
employer provides  coverage . . . for some  period after termina-
tion without complying with COBRA and then gives the notice."

                                13

proffered to date, appear to take a similar position.  See  Prop.
                                                          

Treas. Reg. 1.162-26, 52 Fed. Reg. 22,716 (proposed Apr. 6, 1987;

to be codified at 26 C.F.R. pt. 1), at Q&A-18 ("a  loss of cover-

age  need not occur immediately  after the event,  so long as the

loss of coverage will occur before  the end of the maximum cover-

age period");  see also id.  at Q&A-39 ("The  end of  the maximum
                           

coverage period is measured from the date of the qualifying event

even if  the qualifying event does not result in a loss of cover-
                                                                 

age under  the plan  until some  later date")  (emphasis added).7
                                           

The Proposed  Treasury Regulations  have not yet  been finalized,

are apparently  on hold  pending further  revisions, see  56 Fed.
                                                        

Reg. 53803-03  (1991), and, accordingly,  are not  authoritative.
                                                                

See Oakley v. City  of Longmont, 890 F.2d  1128, 1133 (10th  Cir.
                               

1989) (Treasury Department's interpretation of COBRA not authori-

tative  "[u]ntil  the  agency completes  formal  rule-making  and

promulgates  final regulations"),  cert.  denied,  494 U.S.  1082
                                                

(1990);  see also Sirkin v. Phillips Colleges, Inc., 779 F. Supp.
                                                   

751, 755  (D. N.J.  1991) (declining  to apply  proposed Treasury

regulation).  Nevertheless, pending promulgation of final regula-

                    

     7In  enacting COBRA,  Congress delegated  responsibility for
the  issuance  of  interpretive  regulations  to  three  separate
agencies:  the Departments  of  Treasury, Labor,  and Health  and
Human Services. See,  e.g., 26 U.S.C.   7801,  7805 (Secretary of
                          
Treasury authorized  to "prescribe all needful  rules and regula-
tions  for  the enforcement  of  this title");  29  U.S.C.   1168
(Secretary of Labor authorized to "prescribe regulations to carry
out the  [continuation coverage] provisions"). To  date, only the
Treasury  Department has proposed  regulations under the statute.
See  generally Johnson  v.  Reserve Life  Ins. Co.,  765 F. Supp.
                                                  
1478, 1480-83 (C.D. Cal.  1991) (discussing regulatory overlap in
COBRA provisions). 

                                14

tions, the  Internal Revenue Service has announced  that it "will

consider compliance with the  terms of these proposed regulations

to constitute good faith compliance with a reasonable interpreta-

tion  of the statutory requirements."   See 52  Fed. Reg. 22,716.
                                           

Accordingly, some courts have relied on the Proposed Regulations,

notwithstanding  their interim  status,  to define  the scope  of

employers' duties under COBRA.   See Branch v. G. Bernd  Co., 955
                                                            

F.2d 1574, 1581  (11th Cir. 1992) (finding that  proposed regula-

tions "represent  the proper  construction of  COBRA in  light of

Congress'  intent");   see  also  Lincoln  Gen.   Hosp.  v.  Blue
                                                                 

Cross/Blue  Shield of  Nebraska, 963  F.2d 1136,  1142 (8th  Cir.
                               

1992) (Proposed Regulations show "regular practice" under COBRA);

Communications  Workers of America v.  NYNEX Corp., 898 F.2d 887,
                                                  

888-89 (2d Cir. 1990) (citing Proposed Regulations).8

          Finally,  our reading  accords with  the interpretation

adopted by  Congress in amending COBRA  through the Miscellaneous

ERISA Amendments Act of 1989.  See H.R. No. 101-247, 101st Cong.,
                                  

1st Sess.  52 (1989), reprinted  in 1989 U.S.C.C.A.N.  1906, 1944
                                   

(under the original  version of the  statute, "[i]f the  laid-off

employee . . . elects  continuation coverage, the  maximum period

of that  coverage is  measured from the  date of the  layoff, al-
                                                            

though the period an employer has to  notify the employee that he

                    

     8Moreover,  we note  that the Proposed  Treasury Regulations
are invoked, at various  points, by both parties in  their appel-
late briefs.  Cf. W.R.  Grace & Co. v. United States  E.P.A., 959
                                                            
F.2d 360, 366 n.14  (1st Cir. 1992) (agency's  interim, non-final
regulations do  not control appeal,  but may  be considered  upon
both parties' application "for  the limited purpose of bolstering
. . . analysis").

                                15

or  she has  the right  to elect  continuation coverage  does not

begin to  run until  group health  coverage is  lost.") (emphasis

added).   Although the views  of a subsequent  Congress obviously

are  not binding in determining the intent of an earlier legisla-

ture, see, e.g., United States  v. American Heart Research  Fund,
                                                                

No.  92-2108,  slip op.  at 8  (1st  Cir. June 18,  1993); United
                                                                 

States v. Bay  State Ambulance  & Hosp. Rental  Serv., Inc.,  874
                                                           

F.2d 20, 31 (1st Cir. 1989), "such views are entitled to signifi-

cant  weight . . . and particularly so when the precise intent of

the enacting  Congress is obscure."   Seatrain Shipbuilding Corp.
                                                                 

v.  Shell Oil Co., 444  U.S. 572, 596  (1980) (citation omitted);
                 

see also United States v. Ven-Fuel, Inc., 758 F.2d 741, 758  (1st
                                        

Cir.  1985); Roosevelt  Campobello  Int'l Park  Comm'n v.  United
                                                                 

States  E.P.A., 711 F.2d  431, 436-37  (1st Cir.  1983).   As the
              

accretion of  evidence is compelling,  we conclude that  the Gas-

kells' eighteen-month "continuation coverage" period ran from the

date  of the event which triggered David's loss of benefits under

the terms of the Coop's  group insurance plan, and not  from July

1,  1988, when the Coop ceased its voluntary provision of employ-

er-paid group plan insurance and the Gaskells' self-paid "contin-

uation coverage" commenced.9

                    

     9We acknowledge  the potential  harsh effects of  our inter-
pretation, which effectively shifts to  "qualified beneficiaries"
the  responsibility to  ascertain when  a "qualifying  event" has
occurred  which  would  eventuate in  the  inexorable  loss  of a
contract-right to coverage  under the employer's plan     even if
that  event precedes by  days or months  the actual  loss of plan
                                                   
coverage, the provision of notice by the plan  administrator, and
the  commencement of  any unexpired  "election"  period.   See 29
                                                              
U.S.C.   1165(1)(A) ("election period . . . begins not later than

                                16

          An important  issue remains:  whether,  under the terms

of  the Coop's group insurance  plan, David's loss  of group plan

eligibility inexorably  was triggered by the  commencement of his

disability   leave   (January 14,  1987),   by   his  resignation

(January 14, 1988), or by some  other event.  It is the  terms of

the plan that matter in defining the appropriate "trigger"; thus,

David's reduction in hours is  not a "qualifying event" if  it is

not so  designated in the plan, even if it might have been desig-
                                                          

nated as such, and regardless of the fact that it  may ultimately

have led to the eventual occurrence of a "qualifying event" which
           

was so designated.  See, e.g., Jachim  v. KUTV, Inc., 783 F.Supp.
                                                    

1328,  1332  (D.  Utah  1992) (rejecting  employee's  claim  that

"reduction in hours" was a "qualifying event," where plan provid-

ed no cessation of coverage until employee's actual termination).

          The  record does not contain  a copy of  the Blue Cross

                    

the  date  on which  coverage terminates").    For example,  if a
"qualified  beneficiary" of  a  plan which  offers no  conversion
option  fails to  recognize the  covered employee's  reduction in
hours as a  "qualifying event," and no notice is  provided by the
plan  administrator,  the  qualified  beneficiary  may  find  her
continuation coverage  abruptly  terminated, some  months  later,
with little or no time to arrange for alternative insurance.  The
Gaskells  argue, with  considerable  force, that  this result  is
inconsistent with COBRA's general remedial purpose,  see National
                                                                 
Companies  Health Ben. Plan v. St. Joseph's Hosp., Inc., 929 F.2d
                                                       
1558,  1572-73 (11th Cir. 1991), to avoid sudden losses in cover-
age.  However, in the ordinary case, this sequence of events will
be forestalled  by the  plan administrator's provision  of timely
notice under 29 U.S.C.   1166(a) ("In accordance with regulations
prescribed by  the Secretary . . . . (4)  the administrator shall
notify . . . any qualified beneficiary with  respect to [a quali-
fying]  event  . . .  of  such beneficiary's  rights  under  this
subsection").  Penalties may be enforced against plan administra-
tors who fail to provide such notice.  See id. at   1132(c)(1).
                                              

                                17

group insurance plan; and, with respect to the "triggering event"

which  led to  cessation  of plan  coverage,  the district  court

concluded  that "there  [was] no  evidence concerning  the Coop's

policy with regard to  the provision of benefits to  employees on

disability leave,"  see 762 F.Supp.  at 1541  n.4.  Since  we may
                       

uphold the judgment on  the pleadings only if "it  appears beyond

doubt that the plaintiff can prove no set of facts  in support of
                                                  

[its] claims  which  would entitle  [it]  to relief,"  Conley  v.
                                                             

Gibson, 355 U.S.  41, 45-46  (1957) (emphasis added),  and it  is
      

impossible to determine from the present record whether going  on

full  disability leave would  automatically "trigger" a cessation

of David's  contractual entitlement to  employer-paid group  plan

insurance benefits, cf.  Charles v. Des  Plaines Pub. Co.,  Inc.,
                                                                

No. 91-C-01288 (N.D. Ill.  June 4, 1991), U.S. Dist.  LEXIS 7806,

*5 (noting employee's failure to allege facts showing entitlement
                                                                 

to group  insurance during disability leave),  the district court

judgment was  at least  premature.10  We  accordingly vacate  the

judgment, and remand for further proceedings.

                    

     10For similar reasons,  we decline to rule  on the Gaskells'
alternate argument, that principles of equitable estoppel require
the Coop  to provide "continuation  coverage" under its  plan for
eighteen  months beyond  July 1,  1988.   Even assuming  that the
defense  of equitable  estoppel is  available to  COBRA benefici-
aries,  upon a  proper  showing, where  the terms  of a  plan are
otherwise ambiguous, see National Companies Health Plan, 929 F.2d
                                                       
at  1572-73,  a preliminary  showing  of  ambiguity is  required;
"'estoppel may not be  invoked to enlarge or extend  the coverage
specified in a contract.'" See id.  at 1572 n.13 (quoting Kane v.
                                                              
Aetna  Life  Ins., 893  F.2d 1283,  1285  n.3 (11th  Cir.), cert.
                                                                 
denied, 111  S.Ct. 232 (1990)).  Since  the Blue Cross group plan
      
contract with  the Coop  is not  part  of the  record, we  cannot
determine whether the ambiguity showing can be met here.

                                18

          Since the remaining arguments raised by the Gaskells on

appeal  turn on the terms of the  plan contract, and the validity

of the district court's finding that "the Coop was . . . obligat-

ed  [under  the terms  of the  contract]  to provide  health plan

coverage  to the Gaskells for  a period beginning  July 1, 1988,"

see 762  F. Supp. at 1543,  appellate resolution of  these issues
   

must  await evidence  of  the terms  of  the plan  contract,  and

district court reconsideration of  the Coop's COBRA liability, on

remand.   We  accordingly  vacate the  judgment,  and remand  for

further proceedings.

                                19

          The district court judgment is vacated and the case  is
                                                                 

remanded for further proceedings consistent herewith.
                                                     

                                20