Bank of America Hit with Class Action Over Allegedly ‘Deficient’ COBRA Notice

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A former Bank of America employee claims he and other workers were not provided with proper notice of their right to continued healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

The lawsuit explains that under COBRA, the administrators of certain group health plans, including the plan managed by defendant Bank of America Corporation Corporate Benefits Committee, are responsible for providing proper notice of the availability of continued coverage under the plan to workers who experience a qualifying event, such as termination.

The defendant’s COBRA notice, however, ran afoul of federal law because it failed to provide all the required information in a single notice written “in a manner calculated to be understood by the average plan participant,” the suit says. Instead, Bank of America’s COBRA notification process “offers only part of the legally required information in haphazard and piece-meal fashion,” the case avers, adding that the two COBRA letters sent to the plaintiff were both missing critical information.

Per the complaint, the defendant’s COBRA notice “confused and misled” the plaintiff and caused him to lose health insurance coverage and incur unpaid medical bills.

The case explains that the U.S. Department of Labor, in order to facilitate compliance with COBRA, issued a model COBRA Continuation Coverage Election Notice that contains all the required information. Rather than use the DOL’s model notice, Bank of America allegedly omitted “critical parts” of the form, including the address to which payments should be sent, an explanation of how to actually enroll in COBRA, a physical election form, and information on how coverage can be lost prematurely (e.g., by making late payments).

Per the case, the defendant directed plan members to a general “catch-all” human resources phone number operated by a third party rather than explaining how to enroll in COBRA and included no information about how to enroll after calling the number.

Because the defendant’s COBRA notice, which was confusingly sent in two separate mailings under different covers, failed to include “all required information,” the letter fell short of COBRA’s requirements.

The plaintiff, who resigned from Bank of America in June 2018 following “unbearable working conditions” related to his complaints of discrimination, says the defendant’s allegedly deficient COBRA notices caused him to choose not to elect coverage.

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