MENUMENU
  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR

  • LOGIN
  • SIGN UP FREE

HR Morning

MENUMENU
  • FREE RESOURCES
  • PREMIUM CONTENT
        • SEE MORE
          PREMIUM RESOURCES
  • HR DEEP DIVES
        • Coronavirus (COVID-19) Resources for HR Professionals
          Employment Law
          Labor Law Posting Requirements: Everything You Need to Know
          Recruiting
          businesswoman selecting future employees on digital interfaces
          Recruiting Resources for HR & Hiring Managers
          Performance Management
          vector image of young female making star rating
          Performance Review Resources
          Employment Law
          Understanding Equal Employment Opportunity and the EEOC
          Recruiting
          Onboarding Resources for HR & Hiring Managers
  • CORONAVIRUS & HR
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • Performance Management
  • HR Technology
  • More
    • Leadership & Strategy
    • Compensation
    • Staff Administration
    • Policy & Procedures
    • Wellness
    • Staff Departure
    • Employee Services
    • Work Location
    • HR Career & Self-Care
    • Health Care
    • Retirement Plans

Will health care reform cure your COBRA headaches?

EEOC, notice requirement, wellness
Christian Schappel
by Christian Schappel
October 11, 2013
2 minute read
  • SHARE ON

It’s no secret Obamacare hasn’t been well received by HR professionals. On the whole, they feel it adds unnecessary complexity and costs. But there may be a silver lining to the law.  
It appears likely that healthcare reform will virtually eliminate the need for COBRA insurance coverage, according to a joint report by Kaiser Health News and the Chicago Tribune.
In a nutshell, it says in 2014 COBRA-eligible employees will basically have two options:

  • remain on their ex-employer’s health plan and pay the full plan premium (plus perhaps a COBRA administrative fee), or
  • purchase coverage on an exchange using a government subsidy — which the individuals would likely qualify for since their job loss, which qualified them for COBRA in the first place, likely means their income is now under 400% of the federal poverty line.

That being the case, most would opt for subsidized coverage over paying the high premiums for a COBRA policy by themselves, Kaiser and the Tribune reported.

Much-needed break for employers

Assuming the predictions come true, the migration away from COBRA coverage could produce some much-needed healthcare savings for employers.
That’s because even though it would seem COBRA is funded entirely by the premiums and administrative frees enrollees pay, that’s not really the case.
Studies have found COBRA coverage costs employers a pretty penny. Why? Because only sick people tend to want it.
Since COBRA coverage costs so much — sometimes in excess of $5,000 for individual-only coverage — only those who need expensive medical care tend to sign up for it. And when this happens, it results in losses for self-funded plans and premium hikes for plans purchasing coverage through an insurer.
Adding to the problem is the fact that COBRA gives ex-employees a grace period to sign up — essentially giving them a chance to get sick and then retroactively sign up for the coverage and pay the plan premiums in lieu of the more expensive cost of their medical care.
So by keeping ex-employees off of their COBRA rolls, Obamacare may have found one way to help stymie healthcare cost inflation for employers.
This post originally ran on our sister website, HRBenefitsAlert.com.

Get the latest from HRMorning in your inbox PLUS immediately access 10 FREE HR guides.

I WANT MY FREE GUIDES

Keep Up To Date with the Latest HR News

With HRMorning arriving in your inbox, you will never miss critical stories on labor laws, benefits, retention and onboarding strategies.

Sign up for a free HRMorning membership and get our newsletter!
  • This field is for validation purposes and should be left unchanged.
HR Morning Logo
  • Facebook
  • Twitter
  • Linked In
  • ABOUT HRMORNING
  • ADVERTISE WITH US
  • WRITE FOR US
  • CONTACT
  • Employment Law
  • Benefits
  • Recruiting
  • Talent Management
  • HR Technology
  • Performance Management
  • Leadership & Strategy
  • Compensation & Payroll
  • Policy & Culture
  • Staff Administration
  • Wellness & Safety
  • Staff Departure
  • Employee Services
  • Work Location
  • HR Career & Self-Care

HRMorning, part of the SuccessFuel Network, provides the latest HR and employment law news for HR professionals in the trenches of small-to-medium-sized businesses. Rather than simply regurgitating the day’s headlines, HRMorning delivers actionable insights, helping HR execs understand what HR trends mean to their business.

Privacy Policy Terms of Service
Copyright © 2021 SuccessFuel

WELCOME BACK!

Enter your username and password below to log in

Forget Your Username or Password?

Reset Password

Lost your password? Please enter your username or email address. You will receive a link to create a new password via email.

Log In

During your free trial, you can cancel at any time with a single click on your “Account” page.  It’s that easy.

Why do we need your credit card for a free trial?

We ask for your credit card to allow your subscription to continue should you decide to keep your membership beyond the free trial period.  This prevents any interruption of content access.

Your card will not be charged at any point during your 21 day free trial
and you may cancel at any time during your free trial.

preloader