The Cobra’s Bite: A Financial Stranglehold
For years—no, decades—COBRA continuation coverage has bitten deeply into company balance sheets, affecting CFOs, HR, and Benefits leaders alike. According to a 2020 study by the Employee Benefit Research Institute (EBRI), former employees on COBRA typically outspend their currently employed counterparts by an unsuspecting 300%. The real cost of COBRA is venomous, injecting financial strain where companies least expect it. And it’s not just the companies that suffer; for former employees, the bite is just as deep. According to the 2022 Employer Health Benefits Survey, ‘In 2022, the average annual premiums for employer-sponsored health insurance are $7,911 for single coverage and $22,463 for family coverage.’ When on COBRA, individuals must cover the total cost of group health insurance—both the employee and employer share—plus a 2% administrative fee.
Who Really Takes the Bite?
EBRI’s analysis paints a vivid picture of the average COBRA beneficiary. They are older, less healthy, and more prone to specific health conditions such as COPD, diabetes, and high blood pressure. Not only do they spend more days in the hospital, but their average health care expenditure also hovers around $18,752, almost three times higher than a full-time employee’s $6,724.
The Antidote: Introducing When
Enter “When,” a groundbreaking solution aimed at transforming how companies manage COBRA continuation coverage and offboarding employees. When can save a company tens of thousands of dollars by addressing the financial sinkhole that COBRA presents. More than just a cost-saver, When’s severance solution provides exiting employees the flexibility to find a health insurance plan tailored to their needs.
Time for a Cure
The questions surrounding the necessity of subsidies for COBRA coverage in a post-ACA world are now more debatable than ever. With options like When, the narrative is changing. The venomous economics of COBRA no longer have to dictate the fiscal health of a company or the well-being of its former employees.
When is administering the antidote. Are you ready? Learn more.