A Florida district court judge has denied Wells Fargo & Company’s motion to dismiss a proposed class action suit over deficient COBRA notices sent to thousands of health plan participants. The case is Blessinger et al. v. Wells Fargo & Company, case number 8:22-cv-01029, U.S. District Court for the Middle District of Florida.

Three former Wells Fargo employees sued the company in May 2022 under the Employee Retirement Income Security Act (ERISA), as amended by the Consolidated Omnibus Budget Reconciliation Act (COBRA). After the former employees left the company, they opted to discontinue their medical, dental, and vision benefits through Wells Fargo because of allegedly misleading and threatening COBRA notices that they had received about post-employment benefits. The former employees claimed that the notices were deficient in that they misinformed them and other plan participants about criminal and tax penalties for submitting incomplete information. As a result, the former employees incurred substantial costs in paying for their medical expenses.

Wells Fargo moved to dismiss the suit, arguing that the COBRA notices contained limited and minor alleged defects but were accurate. They also stated that the company could provide additional information to plan participants beyond the minimum requirements.

The judge agreed with the former employees, finding that their complaint was sufficient at this stage of the suit to withstand a motion to dismiss. The former employees also pointed to two other decisions issued by the court over the past 15 months concerning companies that used the same COBRA notices. In one case, the court denied a motion to dismiss, and in the other case, the parties settled after the court denied a motion to stay discovery.

The judge did approve a joint stipulation of the parties that Wells Fargo had no obligation to disclose that it was acting as its own COBRA plan administrator. This stipulation resulted in the dismissal of all claims related to the plan administrator.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.