Walgreen Co. faces a proposed class action that alleges the pharmacy chain failed to provide former health plan participants with adequate notice of their right to continued health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
The 34-page case explains that under COBRA, group health plan sponsors like Walgreens must notify qualified individuals of their right to retain health coverage upon termination or another “qualifying event” defined by the statute.
Instead of using the Department of Labor’s model COBRA form, Walgreens sent plan participants multiple documents that offered only part of the legally required information “in haphazard and piece-meal fashion,” the filing claims. Per the complaint, participants lost their health insurance because they could not understand Walgreens’ “confusing” enrollment notices.
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According to the suit, the documents provided by Walgreens adhered to the model notice “only to the extent that served Defendant’s best interests.” The filing claims that Walgreens’ notification method discouraged qualified individuals from enrolling in COBRA so the pharmacy could pocket the unclaimed expenses.
In addition, the documents at issue failed to comply with several federal regulations, as plan administrators must send a single notice “written in a manner calculated to be understood by the average plan participant,” the case says.
The complaint further argues that Walgreens’ letters omitted certain mandatory details, including the address to which payments should be sent, an explanation of how to actually enroll in COBRA and a physical election form. In further violation of COBRA regulations, the notifications lacked important information identifying the plan administrator, and supply an inaccurate deadline date, the case states.
The four plaintiffs, ex-Walgreens employees and qualified beneficiaries who lost coverage after being terminated, claim that they suffered substantial harm due to the defendant’s deficient COBRA enrollment notice.
“As a result of receiving the COBRA Enrollment Notice, and the subsequent document, Plaintiffs failed to understand the notice and, thus, Plaintiffs could not make an informed decision about their health insurance,” the case says. “Not only did Plaintiffs lose their insurance coverage, and also lose their ability to elect continuation coverage, after Plaintiffs lost their insurance they incurred medical bills resulting in further concrete economic injury.”
The lawsuit looks to cover all participants in and beneficiaries of Walgreens’ health plan who were sent a COBRA notice by the company, in the form sent to the plaintiffs, as a result of a qualifying event and did not elect continuation coverage during the applicable statute of limitations period.
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