Since 1985, COBRA has ensured a path to maintaining healthcare benefits for employees, their spouses and other dependents during separations and hour reductions. By providing departing workers with access to the same insurance, doctors, and prescriptions they had while employed, COBRA protects its beneficiaries from interruptions to necessary care as they transition to new employment. For 40 years, COBRA has been a familiar and easily compliant step in employee offboarding, but is it your best option?
COBRA is a Classic For a Reason
COBRA works. For many employers and their departing employees, it’s an ideal solution to covering gaps in healthcare coverage.
Allows for uninterrupted care. Beneficiaries keep access to the same provider networks, copays, and deductibles they had while employed and retain coverage for preexisting conditions.
Provides a coverage buffer for between 18 and 36 months while employees seek new employment or an individual insurance plan. That extra time can be crucial for employees needing to shop around on the ACA marketplace.
The process is familiar. COBRA has been a part of employee departures since the 1980s. There are ample resources available to guide you and your employees through set up, extension, and termination.
That said, it’s not without its pain points.
Passes considerable cost on to former employees. Up to 102% of your plan’s premium, typically. With healthcare costs at an all time high and continuing to rise, that’s a potentially hefty burden to put on an exiting worker’s shoulders.
That cost may be higher than comparable ACA plans, especially if the employee is eligible for a subsidy.
Self-insured employers may find themselves dealing with high cost claims that are no longer offset by a worker’s productivity.
If an employer swaps healthcare plans, beneficiaries of COBRA must switch, as well. They’ll potentially lose out on the things that made COBRA more appealing to begin with.
If COBRA costs and confusion have left you wondering if your organization could do more, an innovative new approach to separation may be worth looking into.
A Modern Approach to Offboarding with When
Employee departures aren’t just an administrative task, they’re an opportunity. Today’s top talent is looking for organizations that value their wellbeing and development. Sending former workers off with compassion and care is part of that package, and a good experience ensures they leave as brand ambassadors.
Consider When, an AI-powered solution to offboarding that looks beyond the COBRA packet, guiding exiting workers past their final goal posts and optimizing costs for all parties. Their platforms make that last transition easier and more affordable for everyone, providing employees with:
Easy side-by-side comparisons of COBRA and marketplace options, helping former employees to find new insurance faster and easier.
Personalized guidance for individual circumstances, because one size fits one.
Support for subsidy applications and enrollment, ensuring workers are able to secure an affordable option that works for them.
Ongoing assistance during the post-employment transition, maintaining a strong employee experience even after they’ve moved on.
With When, companies can see 70-80% of departing employees choose alternatives to COBRA, resulting in better, more affordable coverage and significant cost savings for former employers.
Building Beyond Tradition
We don’t need to abandon COBRA entirely. For many employees, particularly those who rely on their existing provider network and coverage, it’s the ideal choice. It is just that, though – a choice, and there are more options to explore.
How we say goodbye says just as much about our company culture as how we welcome people in the first place. Tools like When offer a more holistic approach to employee separation for organizations looking to extend support for their employees past that final exit sign.
Ready to transform your employee offboarding experience? Check out When to learn how modern alternatives to traditional COBRA can benefit both your organization and your people.
