Brenntag Hit with Class Action Over ‘Deficient’ COBRA Notices

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Brenntag Mid-South, Inc. has failed to properly notify health plan participants of their right to continued coverage after the occurrence of a qualifying event, a proposed class action alleges.

Per the lawsuit, the defendant’s COBRA notice did not comply with federal law in that it did not include a termination date for coverage or identify the plan administrator. Because the notice was missing “critical information items,” it was therefore not written in a manner that would be understood by the average plan participant, the suit argues. As a result, Brenntag, the case alleges, has threatened proposed class members’ federally protected right to maintain health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

The lawsuit explains that Brenntag, as the sponsor of its employee health insurance plan, is required to send COBRA notices to plan participants who have been terminated or experienced another “qualifying event” that would cause them to lose their coverage. To facilitate compliance with COBRA’s strict requirements, the U.S. Department of Labor has issued a model COBRA notice to be used by plan sponsors, the suit says. Brenntag, however, has refused to use the DOL’s model notice and “deliberately authored and disseminated a notice which omitted critical information required by law,” seemingly in an effort to dissuade plan participants from electing expensive COBRA coverage, according to the suit.

Per the case, Brenntag’s COBRA notice failed to provide the termination date for continued healthcare coverage and the name, address and telephone number of the plan administrator. As a result, the defendant failed to meet the legal requirement that the notice be written in a manner “calculated to be understood by the average plan participant,” the lawsuit alleges.

The case claims Brenntag’s standard practice was to send an initial COBRA notice first and then include election information in a second notice sent only to those who opted for COBRA coverage.

The plaintiff says her parent, who was employed by Brenntag for nearly 11 years before being terminated, was “confused” by Brenntag’s initial COBRA notice and, as a result, did not elect COBRA coverage for himself and his dependents. The suit says the defendant’s actions caused the plaintiff an informational injury in that her parent was not provided the information to which he was entitled by law.  

The case looks to cover all participants and beneficiaries in the defendant’s health plan who were sent a COBRA notice during the applicable statute of limitations period as a result of a qualifying event and who did not elect for COBRA coverage.

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