If you've been administering claims for self-insured employers for any length of time, you've probably noticed something about COBRA participants: they tend to be higher utilizers than the general employee population.
That's not a coincidence—it's adverse selection at work. And until recently, there wasn't much anyone could do about it. COBRA is a compliance obligation, employees have the right to elect it, and the resulting claims are just part of the cost of self-funding.
New tools are emerging that give self-funded TPAs a way to help clients reduce COBRA exposure—not by restricting access, but by ensuring departing employees have the guidance to make informed coverage decisions.
The Pattern You May Have Already Seen
COBRA participants aren't a random cross-section of departing employees. They're disproportionately people with known or anticipated healthcare needs—employees who have a reason to maintain their current coverage even at full premium cost.
The data bears this out: COBRA participants typically generate claims costs two to three times higher than active employees. A participant paying premiums based on $15,000 in average annual costs might generate $150,000 in actual claims. For self-insured employers, that gap hits the bottom line directly.
If you've noticed this pattern in your clients' claims data, you're not alone. It's a well-documented phenomenon. The challenge has always been: what can you actually do about it?
COBRA is a legal right. Employers can't discourage eligible employees from electing coverage. And most departing employees don't have access to the kind of personalized guidance that would help them evaluate whether COBRA is genuinely their best option—or just the path of least resistance.
Why This Has Been a Hard Problem to Solve
Several factors have made COBRA adverse selection difficult to address.
COBRA-specific reporting isn't standard. Most claims reporting aggregates COBRA participants with the general population, making it harder for employers to see the specific cost impact. Even when you can see the pattern, surfacing it requires extra analysis that may not be part of your standard deliverables.
Timing spreads the impact across plan years. COBRA coverage can extend 18 months or more. By the time the claims show up in annual reviews, the connection to specific departure decisions isn't always obvious.
There hasn't been a compliant solution. Employers can't discourage COBRA election, and most don't have the expertise to help departing employees evaluate marketplace alternatives. Until recently, there wasn't a scalable way to provide that guidance.
Organizational silos obscure the connection. The team handling COBRA administration often isn't the same team reviewing claims or negotiating stop-loss. The cost impact sits in a gap between functions.
The result: a problem that's been visible to anyone paying close attention, but without a clear path to solving it.
What's Changed: A New Approach to COBRA Guidance
When is a new platform designed specifically to address this challenge. It extends COBRA administration with AI-powered guidance that helps departing employees understand their full range of coverage options—marketplace plans, Medicaid eligibility, spouse coverage, short-term options, and COBRA when it's genuinely the right fit.
The key insight: many employees default into COBRA because it's the option they understand, not because it's the best choice for their situation. A healthy 28-year-old leaving for a new job in 60 days probably doesn't need 18 months of COBRA coverage at premium rates. But without guidance, they'll often elect it anyway—because that's what the paperwork in front of them describes.
When's AI assistant (Jamie) changes that equation. By helping departing employees evaluate their specific circumstances—income, health status, coverage gaps, timing—more of them end up in coverage that actually fits their needs. For employees who genuinely need COBRA, it remains available. For those who'd be better served by alternatives, they now have the information to make that choice.
The result for self-insured employers: less adverse selection, lower claims, reduced stop-loss exposure, and better renewal positioning.
An Opportunity to Strengthen Client Relationships
For self-funded TPAs, this creates an opportunity to deliver value in a new way.
You're already processing the claims data. You may have already noticed the COBRA utilization pattern. Now there's a tool that lets you do something about it—and position yourself as the partner who brought a solution to a problem your clients may not have fully understood.
Consider the conversation: "We've been looking at your COBRA population's claims experience, and we think there's an opportunity to reduce exposure. There's a new platform that provides personalized coverage guidance to departing employees—it doesn't restrict COBRA access, but it ensures people are making informed decisions. Based on your claims patterns, we think this could save you $75,000 or more annually."
That's a different kind of value than processing claims efficiently. It positions you as a strategic partner who's proactively looking for ways to reduce costs—using data you already have access to.
How the Integration Works
When is designed to complement your existing COBRA process, not replace it.
Simple data integration: A push API handles data transfer in real-time or nightly batches. When you identify a COBRA-qualifying event, When's platform engages the departing employee with personalized guidance.
Co-branded experience: The employee-facing experience can carry your branding alongside When's, reinforcing your role as the benefits partner.
Your process stays intact: COBRA notices, premium collection, compliance tracking—all of it works the same way. When adds a decision-support layer that improves outcomes without disrupting workflows.
Measurable results: Because you're already tracking claims, you can measure the impact over time and demonstrate ROI to clients.
What the Results Look Like
For a typical 500-employee group with 10 COBRA participants annually, clients partnering with When see $75,000 or more in direct claims reductions. Factor in avoided specific stop-loss claims and lower aggregate exposure, and the impact on renewals becomes meaningful.
More importantly, you've helped a client solve a problem that's been costing them money for years—and positioned yourself as the partner who made it happen.
A Solution for a Long-Standing Challenge
COBRA adverse selection isn't new. It's been a known issue for as long as self-funding has existed. What's new is having a compliant, scalable way to address it—one that respects employees' rights while ensuring they have the information to make good decisions.
If you've seen this pattern in your clients' data and wondered what could be done about it, now there's an answer.
Want to Learn More?
If you're interested in exploring how When could help your self-insured clients reduce COBRA exposure, we'd welcome the conversation.
Learn how self-funded TPAs are using When to turn a long-standing challenge into measurable client savings.
