Optum Financial sued over $20 COBRA and FSA online processing fee

Estimated reading time: 9 minutes.

Key facts

What happened: A San Francisco man filed a proposed class action on October 14, 2026, against Optum Financial, Inc. and its subsidiary ConnectYourCare, LLC over a $20 "Processing Fee" charged on online health benefit payments.
The core claim: The lawsuit says Optum adds a flat $20 fee to every one-time online payment for COBRA coverage and flexible spending account (FSA) and health savings account (HSA) contributions, discloses it only at checkout and presents it as mandatory.
The COBRA angle: Federal rules generally cap what COBRA participants can be charged at 102% of the plan's cost. The complaint says the $20 fee comes on top of the 2% administrative charge Optum already collects.
The plaintiff's example: Ross Delkhaste says his May 5, 2026, payment of $924.59 for medical, dental and FSA coverage was charged $944.59.
What he wants: Damages, restitution, disgorgement and a court order stopping the fee, for himself, a nationwide class and a California class.
Company response: Optum had not filed a response or made a public statement on the case that we could find.
The case: Delkhaste v. Optum Financial, Inc., No. 3:26-cv-11895, U.S. District Court for the Northern District of California.

What the lawsuit is about

When people lose a job, many keep their employer's health insurance through COBRA, a federal law that lets workers and their families continue group coverage for a limited time. They usually pay the full premium themselves, and many employers hire outside companies to collect those payments.

Optum Financial is one of those companies. Ross Delkhaste, a San Francisco resident who used Optum's online portal to pay for his COBRA coverage, says the company adds a $20 "Processing Fee" every time someone makes a one-time monthly payment online. His complaint calls it a "junk fee" and a "pay junk fees to get health care" scheme.

The case was filed in the U.S. District Court for the Northern District of California by the law firms KalielGold PLLC and Pearson Warshaw LLP. It was first assigned to U.S. Magistrate Judge Peter H. Kang and reassigned on October 16, 2026, to U.S. District Judge Trina L. Thompson.

The fee in one example The complaint uses a $700 monthly COBRA plan to explain its theory. Federal rules allow a 2% administrative charge, which is $14 on that plan, for a maximum total of $714. The lawsuit says Optum's $20 fee is charged in addition to that 2%, so the total charged would exceed the federal cap.

How COBRA payments work

Who qualifies. COBRA generally applies to employers with 20 or more employees. It covers workers and family members who lose group health coverage after a qualifying event such as a job loss, reduced hours, divorce or the death of the covered employee.

How long it lasts. Coverage generally lasts 18 months, or up to 36 months for certain events, according to the U.S. Department of Labor and the Congressional Research Service.

What it costs. Under Department of Labor guidance and federal tax regulations at 26 C.F.R. § 54.4980B-8, a plan may charge COBRA participants up to 102% of the cost of the coverage. The extra 2% covers administrative costs. A plan may charge up to 150% during an 11-month disability extension.

Who collects the money. Many employers use third-party administrators to handle COBRA notices and payments. The complaint says that when an employer uses Optum, participants make payments directly to Optum through its online portal, and that the plaintiff could not choose a different administrator.

FSAs and HSAs. Flexible spending accounts and health savings accounts let people set aside money for medical costs. The complaint says Optum also administers these accounts for people enrolled in COBRA and charges the same $20 fee on online deposits.

Who the parties are

The plaintiff. Ross Delkhaste lives in San Francisco. He says he enrolled in COBRA in April 2025 for medical and dental coverage and to keep contributing to his FSA. His monthly costs were $710.86 for medical, $43.73 for dental and $170 for his FSA, a total of $924.59.

Optum Financial, Inc. Optum Financial is a Delaware corporation based in Eden Prairie, Minnesota. It is part of Optum, the health services business of UnitedHealth Group. The complaint quotes Optum as saying it "processes more than $500 billion in healthcare payments annually" and says it serves as administrator for more than 58,000 employers.

ConnectYourCare, LLC. ConnectYourCare is a Maryland company wholly owned by Optum Financial. The complaint says the two companies together run the online platform people use to manage COBRA benefits.

What the complaint alleges

These are allegations that have not been tested in court.

The fee cannot be avoided online. According to the complaint, Optum charges the $20 fee on all one-time monthly payments made online, regardless of whether the person pays by bank transfer (ACH), debit card or credit card, and regardless of the payment amount.

It shows up only at checkout. The complaint says Optum does not explain the fee during COBRA sign-up and adds it only at checkout, after a lengthy enrollment process. It says the fee is presented as mandatory and that Optum does not tell people about any other way to pay without it.

Paying ahead costs more. The lawsuit says the portal does not allow someone to pay several months at once. A person who wants to prepay six months must make six separate payments, which the complaint says means $120 in fees.

The fee exceeds the COBRA cap. The complaint argues the 2% administrative charge already pays for the work of administering COBRA, so charging $20 more for "processing" breaks the federal limit.

What happened to the plaintiff. Delkhaste says he paid his May 5, 2026, premium by ACH transfer and was charged $944.59, which includes the $20 fee. He says he did not know about the fee before reaching the payment page and believed he had to pay it to keep his health coverage.

The complaint says people often pay online to avoid missing deadlines or the risk of a mailed check getting lost. Missing a COBRA payment can end coverage.

Check your own statements If you pay COBRA, FSA or HSA amounts through Optum's online portal, your payment confirmations should show the premium and any added fee. Keeping those records can help you understand what you paid if the case moves forward. Do not skip or delay a premium payment because of the lawsuit, since late payment can end your coverage.

The legal claims

The complaint brings four claims.

California Unfair Competition Law (UCL). This law bans unlawful, unfair or fraudulent business practices. It is brought for the California class and allows restitution and injunctions.

California Consumers Legal Remedies Act (CLRA). This law bans specific deceptive practices in consumer transactions. A 2024 amendment, Civil Code § 1770(a)(29), made "drip pricing" illegal. That is the practice of advertising a price and then adding mandatory fees later. The complaint says the plaintiff's lawyers sent Optum the written notice the CLRA requires and will seek damages under that law if Optum does not fix the problem within 30 days. For now, the CLRA claim asks for an injunction.

Unjust enrichment. This claim, brought for the nationwide class, says Optum should give back money it collected unfairly.

Minnesota Prevention of Consumer Fraud Act. This law, Minn. Stat. § 325F.68 and following sections, bans fraud and misrepresentation in sales. The complaint says Optum's own Terms of Use choose Minnesota law to govern its relationship with users nationwide, which is why the plaintiff relies on it for the nationwide class.

The complaint also points to Federal Trade Commission statements criticizing fees disclosed late in a transaction, and to FTC guidance that online disclosures should appear before a buyer decides to purchase.

The plaintiff asks for actual, statutory, treble and punitive damages, restitution, disgorgement, interest and attorneys' fees, along with an injunction.

Who may be affected

The complaint proposes two groups:

Nationwide class: all persons in the United States who were charged the fee by Optum in relation to COBRA, FSA or HSA benefits, during the fullest period allowed by law.
California class: all persons charged the fee while living in California, during the same period.

No class has been certified, and there is no settlement. You do not need to do anything to stay in a proposed class.

Watch for official notice only If this case ever settles, notice would come from a court-approved administrator. There is no claim form, settlement website or deadline now, so be wary of anyone asking for payment or account details to join. If the case settles or is certified, class members would normally receive notice with instructions.

If you think you paid the fee, keep your payment confirmations and bank or card statements. For cases that are open now, see our list of class action cases you can join.

Timeline

Date	Event
April 2025	Delkhaste enrolls in COBRA coverage administered through Optum
May 5, 2026	Delkhaste pays his premium by ACH and is charged the $20 fee
October 14, 2026	Complaint filed, Case No. 3:26-cv-11895
October 16, 2026	Case reassigned to U.S. District Judge Trina L. Thompson

What happens next

Optum must be served and then respond to the complaint. Defendants in fee cases often move to dismiss, and the court will decide whether the claims can proceed and which state's law applies to the nationwide class.

The CLRA notice could also change the case. If Optum does not respond to the plaintiff's demand within 30 days, the complaint says he will amend it to seek CLRA damages.

If the case survives early motions, the parties would exchange evidence and the plaintiff would ask the court to certify the classes. Any payment to class members would come only from a settlement or judgment.

What remains unclear

How Optum will respond. The company had not addressed the claims in court or publicly when we checked.
Whether there is a fee-free way to pay. The complaint says Optum does not disclose one, but it does not rule out mail or other options.
How many people paid the fee. The complaint estimates "thousands" but gives no number.
How far back the class reaches. The complaint says "the fullest period allowed by law" without naming a start date.
How HSA payments fit. The complaint includes HSA deposits, but it also quotes Optum material saying HSA contributions run through Optum Bank and "cannot participate through COBRA," which a court may have to sort out.
Whether the fee applies to every employer plan. The complaint describes a uniform fee but does not say whether any employer contracts differ.

This article is for information only and is not legal advice.

Frequently asked questions

What is the Optum $20 processing fee lawsuit about?

It claims Optum Financial charges a $20 fee on every one-time online payment for COBRA, FSA and HSA benefits, discloses it only at checkout and, for COBRA, charges more than federal rules allow.

Does COBRA limit what I can be charged?

Yes. Federal rules generally allow a plan to charge COBRA participants up to 102% of the cost of coverage, or up to 150% during a disability extension. The lawsuit argues Optum's fee pushes the total above that limit.

Is there a settlement or claim form?

No. The case was filed on October 14, 2026, no class has been certified and there is no settlement, claim form or deadline.

Who is the defendant?

Optum Financial, Inc., based in Eden Prairie, Minnesota, and its subsidiary ConnectYourCare, LLC. Optum is part of UnitedHealth Group.

Should I stop paying the fee?

No. The complaint says missing a COBRA payment can end your coverage. Keep paying on time and save your payment records.

Why does the lawsuit use Minnesota law?

The complaint says Optum's own Terms of Use select Minnesota law, so the plaintiff relies on Minnesota's consumer fraud statute for the nationwide class.