Let's be honest about COBRA: for most Benefits TPAs, it's a checkbox. You offer it because clients expect it, not because it's driving meaningful revenue or differentiation. The service is commoditized, margins are thin, and nobody's winning RFPs because their COBRA notices go out on time.

But a handful of benefits TPAs are starting to see COBRA differently—not as a compliance burden, but as an underleveraged opportunity to create meaningful value for employer clients and re-positioning themselves from vendor to trusted partner.

The COBRA Commodity Trap

If you administer HSAs, FSAs, HRAs, or other consumer-directed accounts, COBRA is probably part of your service portfolio. And if you're like most benefits TPAs, your COBRA offering looks a lot like everyone else's: send the notices, collect the premiums, stay compliant, move on.

The problem with commodity services is that they invite commodity pricing. When every competitor offers functionally identical COBRA administration, the conversation inevitably shifts to cost. You're competing on basis points instead of value—and that's a race to the bottom.

Meanwhile, COBRA represents a genuine pain point for your employer clients that nobody's actually solving. Employees are confused by their options. HR teams are fielding questions they're not equipped to answer. And departing employees are making coverage decisions that don't serve their needs—often defaulting into expensive COBRA coverage when better alternatives exist.

What Employers Actually Need (That Nobody's Delivering)

When an employee leaves a company, they face a coverage decision that most aren't prepared to make. The typical COBRA election notice is a compliance document, not a decision-support tool. It explains rights and deadlines, but it doesn't help someone figure out whether COBRA is actually the right choice for their situation.

For a 28-year-old leaving for a new job that starts in 45 days, COBRA is probably overkill. For a 58-year-old managing a chronic condition, it might be essential. For someone whose spouse has employer coverage, it might be unnecessary. The right answer depends on circumstances that a standard COBRA notice can't address.

This gap creates problems for everyone. Employees make uninformed decisions. HR teams spend time on questions outside their expertise. And employers—especially self-insured ones—absorb the cost consequences of those decisions without ever connecting the dots.

Benefits TPAs who can fill this gap are offering something their competitors can't.

Upgrading COBRA: From Compliance to Concierge

The opportunity for Benefits TPAs isn't to process COBRA better—it's to transform what COBRA means for departing employees and the employers who serve them.

Imagine if your COBRA offering included personalized guidance that helped each departing employee understand their full range of options: marketplace plans, Medicaid eligibility, spouse coverage, short-term options, and yes, COBRA when it's genuinely the right fit. Not a generic FAQ, but AI-powered decision support that accounts for their specific situation.

That's a fundamentally different value proposition. You're not just administering COBRA—you're helping employers deliver a better offboarding experience. And in a tight labor market where employer brand matters, that distinction resonates.

For your employer clients, this means:

A departing employee who gets thoughtful, personalized guidance has a different experience than one who gets a compliance notice and a premium invoice. That shows up in Glassdoor reviews. It affects whether former employees refer candidates or consider returning. It signals that the company cares about people even after they've left.

For your sales team, this means:

"We handle COBRA administration" is a compliance statement that every competitor can match. "We help your departing employees navigate healthcare transitions with AI-powered guidance" is a differentiated capability that changes the RFP conversation.

The Cost Savings Your Clients Don't Know They're Missing

There's another dimension to this opportunity that benefits TPAs don't always see directly: the financial impact on employer clients, particularly self-insured ones.

COBRA participants aren't a random cross-section of departing employees. They tend to be higher healthcare utilizers—people with known or anticipated medical needs who have a reason to maintain coverage at full premium. This adverse selection means COBRA participants typically generate claims costs two to three times higher than active employees.

For self-insured employers, that's real money. A participant paying premiums based on $15,000 in average annual costs might generate $150,000 in actual claims. The employer absorbs that gap directly, plus the downstream impact on stop-loss renewals.  For fully insured employers, COBRA participants can have an outsized impact on experience rating and renewal rates.

When departing employees get proper guidance and end up in coverage that actually fits their needs—rather than defaulting into COBRA because it's the path of least resistance—employers see measurable savings. For a typical 500-employee company, that can mean $75,000 or more annually in reduced claims exposure.

As a benefits TPA, you may not process the medical claims yourself. But you can be the partner who brought a solution that delivered real savings—and that's a powerful position in client retention conversations.

Calculate Your Savings

The Revenue Opportunity For Benefits TPAs

Here's where it gets interesting: upgrading your COBRA offering doesn't just differentiate your service—it can generate meaningful new revenue.

When partners with Benefits TPAs through a revenue share model based on the same PEPM structure you're already familiar with. For every employee enrolled in a COBRA-eligible benefit, When shares a portion of that PEPM with you as the TPA partner. This creates a new revenue stream on top of your existing COBRA administration fees.

This isn't about steering employees away from COBRA—it's about ensuring they end up in the coverage that's actually right for them. Many employees would be better served by a marketplace plan than by paying COBRA premiums for coverage they don't need. When they make that choice with proper guidance, everyone benefits—including you.

How the Partnership Works

When extends your COBRA administration with an AI-powered assistant (Jamie) that guides departing employees through all their coverage options. The integration is designed to complement your existing process, not replace it.

Simple integration: A push API handles data transfer in real-time or nightly batches. When you send a COBRA-qualifying event, When's platform engages the departing employee with personalized guidance.

Co-branded experience: The employee experience carries your branding, reinforcing your role as the benefits partner while When handles the coverage guidance and enrollment.

Your process stays intact: COBRA notices still go out. Premium collection still works the same way. When adds a decision-support layer that makes the overall experience better.

Revenue flows back: New service offering equals new revenue stream 

From Checkbox to Competitive Advantage

COBRA administration will always be part of the benefits TPA service portfolio. The question is whether it's a commodity checkbox or a genuine point of differentiation.

The TPAs who figure out how to deliver real value through COBRA—better employee experiences, smarter coverage decisions, cost savings for clients, and new revenue streams—will have an advantage that's hard to replicate by competitors focused solely on compliance.

Ready to Upgrade Your COBRA Offering?

If you're a benefits TPA looking to differentiate your service, deliver measurable value to clients, and create new revenue from an underleveraged product line, we should talk.

Become a Partner

Learn how benefits TPAs are transforming COBRA from a compliance checkbox into a competitive advantage.

When is a licensed insurance agency specializing in post-employment benefits. Our AI-powered platform helps departing employees navigate healthcare transitions while creating value for TPA partners and their employer clients.