Optum COBRA, FSA and HSA $20 processing fee lawsuit (Delkhaste v. Optum Financial)

People who keep their health coverage through COBRA after leaving a job often pay the full premium themselves. A new lawsuit says Optum, a large benefits administrator, adds a $20 "processing fee" each time they pay online, on top of the 2% administrative charge federal law already allows.

The case is Delkhaste v. Optum Financial, Inc., No. 3:26-cv-11895, filed October 14, 2026, in the U.S. District Court for the Northern District of California. It also names ConnectYourCare, LLC. It is a proposed class action. No court has ruled, no class has been certified and there is no settlement.

Optum Financial, Inc. is a Delaware corporation based in Eden Prairie, Minnesota. ConnectYourCare, LLC is a Maryland company that the complaint describes as Optum Financial's wholly owned subsidiary. Together, the complaint says, they act as a third-party administrator for employers' COBRA coverage and run an online portal at cobra.optumfinancial.com. The complaint cites company materials saying Optum serves as administrator for more than 58,000 employers.

Plaintiff Ross Delkhaste lives in San Francisco. He is represented by KalielGold PLLC and Pearson Warshaw, LLP.

According to the complaint, Delkhaste's former employer used Optum for COBRA, so he had no choice of administrator. He enrolled in COBRA in April 2025 for medical and dental coverage and to keep contributing to his flexible spending account. His monthly costs were $710.86 for medical, $43.73 for dental and $170 for his FSA, a total of $924.59.

On May 5, 2026, he paid through Optum's online portal by ACH bank transfer and was charged $944.59, including a $20 fee. He says he did not know about the fee before reaching the payment portal and believed he had to pay it to keep his coverage.

The complaint says Optum charges the $20 fee on every one-time monthly online payment, whatever the payment method or amount. It says the portal does not let users pay several months at once, so paying six months in advance means six payments and $120 in fees.

Delkhaste says the fee is a junk fee. He says it is disclosed only at checkout after a long sign-up process, presented as mandatory, and paired with no information about other ways to pay. He also says it provides no real service because employers already pay Optum, and because COBRA premiums can include only a 2% administrative charge, which he says Optum already collects. These are allegations.

He brings four claims:

• Violation of California's Unfair Competition Law.
• Violation of California's Consumers Legal Remedies Act, including its ban on drip pricing.
• Unjust enrichment, for the nationwide class.
• Violation of the Minnesota Prevention of Consumer Fraud Act.

The complaint says Optum's website terms of use choose Minnesota law, and argues that Minnesota law should apply to the nationwide class for that reason. It also says Delkhaste does not concede that the terms bind him.

We found no response from Optum in court or in public.

Nothing has been decided. The public docket shows the case is assigned to Judge Trina L. Thompson and that summonses were issued to both defendants. The court has not ruled on whether the fee is lawful or whether the case can proceed as a class action.

The complaint proposes two groups:

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

Excluded are the presiding judge and family, Optum and its subsidiaries, parents and affiliates and their current and former employees, officers and directors, people who opt out, people whose claims were already decided or released, and counsel. The definitions could change.

You are most likely covered if your COBRA payments went through an Optum Financial or ConnectYourCare portal and your receipts show a $20 processing fee.

1. Log in to your Optum COBRA account and save payment history showing each processing fee.
2. Keep your COBRA election notice and premium statements, which show the plan premium and administrative charge.
3. If you are still paying, ask the administrator in writing whether you can pay by mail or another method without the fee, and keep the reply.
4. Watch for a class notice if the case is certified or settles.

There is no payment now. The complaint asks for actual, compensatory, statutory, treble and punitive damages or restitution as the law permits, disgorgement of profits, interest, and attorneys' fees. These are requests, not awards. For someone who paid online for 18 months, the fees would total $360 at $20 a payment, but any recovery would depend on a court ruling or settlement.

• April 2025: Delkhaste enrolled in COBRA.
• May 5, 2026: He paid $944.59 online, including the $20 fee.
• October 14, 2026: Complaint filed.

COBRA generally lasts up to 18 or 36 months depending on the qualifying event. There are no claim, opt-out or objection deadlines in the lawsuit yet.

• COBRA: A federal law that lets workers and families keep employer group health coverage for a limited time after events like job loss or divorce, usually at their own cost.
• 102% rule: Federal law generally caps COBRA premiums at 102% of the plan's cost, meaning a 2% administrative charge.
• FSA and HSA: Tax-advantaged accounts for medical expenses. An FSA can be continued through COBRA.
• Drip pricing: Showing a lower price first and adding mandatory fees later in the purchase.
• Disgorgement: An order to give up profits gained from wrongdoing.

Optum must respond to the complaint by answering or moving to dismiss. It may also raise any arbitration or other terms in its user agreements, which we have not reviewed. The court would then decide whether the claims can go forward.

This article relies on the complaint, the court docket, 29 U.S.C. 1162 and the U.S. Department of Labor's worker's guide to COBRA. The 58,000-employer figure and the plaintiff's payment details come from the complaint. Claims that the fee is deceptive or unlawful are allegations. We did not log in to Optum's portal or confirm the fee independently.

Class Action Pulse is not a law firm or settlement administrator and does not guarantee eligibility or payment. This article is general information, not legal advice.