Auto Club Group $1M COBRA Notice Class Action Settlement

The Auto Club Group

Participants or beneficiaries of The Auto Club Group’s health plan who received a Consolidated Omnibus Budget Reconciliation Act Notice between May 1, 2018, and May 1, 2024, but did not elect continuation coverage may qualify to receive approximately $3,451 from a class action settlement.

The Auto Club Group agreed to pay $1 million to settle a class action alleging it sent untimely and insufficient COBRA notices to certain former employees and beneficiaries. The lawsuit claimed these notices failed to inform recipients about how to exercise their rights to elect COBRA continuation coverage and did not state the cost of continuing health insurance as required by federal law.

Who are the class members?

Class members must meet all of the following criteria:

They were participants or beneficiaries in The Auto Club Group’s health plan.
They received the specific COBRA Notice at issue between May 1, 2018, and May 1, 2024.
They did not elect COBRA continuation coverage after receiving the notice.

Membership in the settlement class is determined solely by the company’s records. Individuals who received a notice about the settlement are most likely class members. There are an estimated 184 potential class members.

How much can class members receive?

Each class member is eligible to receive a payment from the $1 million settlement fund. The settlement administrator will divide funds equally among all class members after deductions for attorneys’ fees, litigation costs, settlement administration expenses and a service award for the class representative.

The anticipated net payment per class member is approximately $3,451.

If any checks remain uncashed after 60 days, the settlement administrator will donate the remaining funds to Legal Services of Eastern Michigan, a nonprofit legal aid organization.

No action needed to receive payment

Class members do not need to file a claim to receive payment. They will automatically receive a settlement check after the court approves and finalizes the settlement.

However, those who need to update their mailing address should contact the settlement administrator.

Settlement administrator’s mailing address: Auto Club COBRA Settlement, P.O. Box 2002, Chanhassen, MN 55317-2002, 866-654-7437

Payout options

Paper check

$1 million settlement fund breakdown

The $1,000,000 settlement fund includes:

Settlement administration costs: $12,000 (estimated)
Attorneys’ fees: Up to $333,300
Attorneys’ expenses: Up to $10,000
Service award to class representative: Up to $10,000
Payments to eligible class members: The remainder of the fund

Important dates

Fairness hearing: Dec. 4, 2025

When is the Auto Club COBRA settlement payout date?

The settlement administrator will mail settlement payments to class members approximately 31 days after the court grants final approval and resolves any appeals.

Why did this class action settlement happen?

The class action lawsuit alleged The Auto Club Group sent Consolidated Omnibus Budget Reconciliation Act notices to former employees and beneficiaries that were late and failed to include required information about the cost of continuing health insurance coverage. The plaintiff claimed these actions violated federal law and related regulations.

The Auto Club Group denied all allegations and asserted that its notices complied with all legal requirements. Both sides agreed to settle the case to avoid the expense and uncertainty of further litigation.