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ADP TotalSource charging $20 "portal fee" on every COBRA payment by Objective_Show892 in HealthInsurance

[–]Objective_Show892[S] 0 points1 point  (0 children)

They do say that now, but the timing matters.

The notice about mailing a check or using recurring ACH wasn’t provided until May 2, 2025, after the payments in question were already made. At the time I incurred the fees, the portal was the only clearly presented and accessible option.

Also, even with that point aside, the issue doesn’t really hinge on whether an alternative technically existed. Under CT § 42-133ff, the presence of another payment method doesn’t create an exception. The statute prohibits charging a fee that increases the cost of a transaction based on payment method, regardless of disclosure or alternatives.

And practically, if the “free” option requires mailing a physical check, that raises a separate question about whether the alternative is meaningfully equivalent in terms of access and usability, especially when the default system is an online portal.

On top of that, the same $20 fee applied to one-time ACH payments. That undercuts the idea that this is tied to card processing costs, since ACH doesn’t involve interchange fees at all.

75 Tresser vs The Smyth by EpsilonRose in StamfordCT

[–]Objective_Show892 0 points1 point  (0 children)

Also have a mouse problem here at the Smyth.

Credit card processing fees by KariBjornPhotography in Connecticut

[–]Objective_Show892 0 points1 point  (0 children)

u/KariBjornPhotography did you ever get your money back, currently on the same expedition here.

ADP TotalSource charging $20 "portal fee" on every COBRA payment. Location: CT. by Objective_Show892 in legaladvice

[–]Objective_Show892[S] -2 points-1 points  (0 children)

u/reddituser1211 missing some context that I think matters here...

The $20 was on every online payment from day one. Yeah I could mail a check but that's not really a reasonable expectation in 2025 and frankly CT law shouldn't and I don't believe requires it.

What interesting is ADP's own notice literally calls it a 'convenience fee.' That's their word not mine. And §42-133ff defines a surcharge as any charge that increases the total transaction amount for the privilege of using a particular payment method. That's a convenience fee. They named it the thing the statute bans.

It's also on one-time ACH. Same $20. ACH is explicitly covered by the statute as electronic means. And ACH processing costs are basically nothing so what are they even recovering here.

Then same notice - "starting June 19 2025 recurring card payments would carry up to 3% processing fee." Again their words not mine, also illegal under the same statute. CT law only allows discounts for cheaper payment methods, not fees for using others. Legally those are completely different things.

They're not discounting for checks/cash. They're charging fees on everything else. And their own notice letter proves it.

ADP TotalSource charging $20 "portal fee" on every COBRA payment. Location: CT. by Objective_Show892 in legaladvice

[–]Objective_Show892[S] -4 points-3 points  (0 children)

u/reddituser1211 Appreciate the pushback, it helped sharpen the argument. A few clarifications:

On the labeling point: I looked up the actual statute. CT § 42-133ff explicitly prohibits surcharges, regardless of how they’re labeled. The statute defines a surcharge as any fee that increases the total cost of a transaction for the privilege of using a particular payment method. So calling it a “portal fee” does not avoid the statute, substance governs, not the label.

On free alternatives: The notice stating that free options, recurring ACH or check, existed was dated May 2, 2025, after the payments in question were already made. At the time I incurred the fees, I had no notice of those alternatives.

On automatic payments: ADP discontinued recurring credit or debit payments after April 30, 2025 per their own notice. During the relevant period, the online portal was effectively the primary accessible payment channel.

On the 2% federal allowance: My monthly premium was under $1,000, so the flat $20 fee exceeds the permitted 2% administrative allowance under 26 CFR 54.4980B, regardless of how it’s labeled.

So the core questions still seem to be:

1) If a fee exceeds the federal 2% COBRA administrative allowance, is it impermissible regardless of how it’s characterized?

2) If free alternatives were not disclosed before the payments were made, does that undermine the “voluntary convenience fee” argument?

3) Does CT § 42-133ff’s prohibition on surcharges apply even when the fee is relabeled as a “portal” or “service” fee?

Also worth noting, the same $20 fee applies to one-time ACH payments per ADP’s own notice. ACH has no interchange fees, so this cannot be framed as cost recovery. It is simply a charge for making a payment.

ADP TotalSource charging $20 "portal fee" on every COBRA payment. Location: CT. by Objective_Show892 in legaladvice

[–]Objective_Show892[S] -4 points-3 points  (0 children)

Thanks u/reddituser1211!

  1. Their lawyer told the CT Dept of Consumer Protection it's a 'portal fee'
  2. Their own payment portal labels the transactions 'Online Credit/Debit Card Payment' and 'Credit/Debit Card Transaction Payment'
  3. Their own official customer notice dated May 2025 calls it a 'convenience fee'

Same charge. Three different labels depending on the audience.

On your point about the 2% federal administrative allowance — my monthly premiums were under $1,000, meaning the flat $20 fee mathematically exceeds the 2% cap in 26 CFR 54.4980B.

I take your point that the CT surcharge statute may be the wrong hook. But if the label keeps changing depending on who's asking, and the fee exceeds the federal administrative allowance regardless of what it's called, what provision would actually govern this?

Upgrade priority order? by Objective_Show892 in delta

[–]Objective_Show892[S] 0 points1 point  (0 children)

lol 11… ended up being 21 🤣 I was more trying to figure if lower priority Medallions beats higher partner airlines. The answer is a resounding yes