Class Action Claims Capital One Provides Deficient COBRA Notices

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A proposed class action alleges COBRA notices issued by Capital One Financial Corporation are missing key information on the continuation of healthcare coverage and thus fail to comply with federal law.

According to the 18-page suit, the sponsors of group health plans are required under the Consolidated Omnibus Budget Reconciliation Act (COBRA) to inform employees who experience a qualifying event that would end their health coverage, such as termination, of their right to continued coverage under the law. Although the law specifies that certain information must be included in each COBRA letter, Capital One, the case alleges, has sent deficient notices that threaten consumers’ ability to maintain their health coverage.

More specifically, the complaint says Capital One has failed to both specify a termination date for COBRA coverage if elected and sufficiently identify the plan administrator. Absent this information, the COBRA notice is not “written in a manner calculated to be understood by the average plan participant,” another requirement under COBRA, the lawsuit alleges.

According to the suit, the U.S. Department of Labor has issued a model COBRA notice to facilitate compliance with the law. Capital One has nevertheless failed to use the model notice or meet the notice requirements under COBRA by leaving out required information, the lawsuit argues. The case alleges that the bank’s conduct was intentional and meant to discourage plan participants from enrolling in continued COBRA coverage.

As the case tells it, it is Capital One’s practice to send an initial COBRA election notice to those who experienced a qualifying event and then send an additional notice to those who elect COBRA coverage. The suit says the required information that was missing from the first notice—including the COBRA coverage termination date and identity of the plan administrator—is included only in the second notice.

One of the plaintiffs alleges that she was fired from Capital One for “reasons she believes were related to her age” and thereafter received a COBRA notice that left her and her husband confused and therefore unable to make an informed decision about whether to opt for continued coverage. As a result, the plaintiffs did not elect coverage and were forced to purchase more expensive insurance through the husband’s employer, the case alleges.

The lawsuit claims that the COBRA form used by Capital One is commonly known as the “WageWorks” form and is the subject of “many, many deficient COBRA notice lawsuits.”

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