District Court Addresses COBRA Notices in Class Action Lawsuit

On August 29, 2023, in Bryant v. Walgreen Co., a federal district court dismissed most of the claims against a group health plan sponsored by Walgreens Co. (Walgreens), most notably the plaintiffs’ claim that Walgreens failed to adequately notify them of their right to continue health coverage as required by the COBRA statute.

COBRA rules require plan administrators to notify qualified beneficiaries of their rights to continued coverage in a manner calculated to be understood by the average plan participant, including information sufficient for qualified beneficiaries to obtain such coverage should they wish to do so.

COBRA administrators typically comply with this requirement with one election notice. Walgreens, however, used two different notices for this purpose, titling the first notice the “COBRA Enrollment Notice” and the second “Important Information About Your COBRA Continuation Coverage.”

The plaintiffs contended that these notices failed to provide adequate information for qualified beneficiaries to make informed decisions about their health coverage as required by COBRA, such as the name, address, and telephone number of the plan administrator, an explanation of the plan's procedures for electing continuation coverage, including an explanation of the time period during which the election must be made, and the date by which the election had to be made, and the address which payments should be sent. The plaintiffs further contended that Walgreens compounded the problem by confusing recipients with two separate election notices rather than a single notice, which the plaintiffs argued COBRA’s regulations implicitly require.

The court dismissed all of the plaintiffs’ claims except for an allegation that the notices provided inaccurate election deadline information to one employee whose qualifying event occurred during the COVID-19 Outbreak Period. As for the rest, the court decided the plaintiffs failed to show how the allegedly inadequate provisions did cause, or even reasonably could have caused, any harm to them. The court furthermore held that COBRA regulations neither expressly nor implicitly require that the election notice take the form of a single notice alone.

This case is important because it emphasizes that notice to qualified beneficiaries of their rights to the continuation of group health plan coverage is the linchpin of COBRA. Administrators should not construe this ruling as a license to take shortcuts with election notices. This decision was not so much a function of the court’s leniency regarding the adequacy of COBRA notices as it was a function of the plaintiffs’ failure to adequately plead their claims (e.g., the plaintiffs originally claimed that the notices did not identify a plan administrator only to have to concede later that the notices did indeed do just that). Accordingly, the court’s dismissal of these claims was “without prejudice,” meaning that the plaintiffs are free to refile these claims with more supporting information should they wish to do so.