The latest COBRA benchmarks
February 10, 2009 by Bill MeltzerPosted in: Cobra, In this week's e-newsletter, Latest News & Views
It’s an unpleasant reality that with many firms downsizing due to the economy there would be a huge increase in COBRA notices.
According to the most recent national statistics, the average monthly COBRA premium is about $700 for maintaining individual coverage and $1,300 for family coverage. This varies by region and by type of plan.
While 102% of the direct cost is passed along to the former employee, there are also issues of administrative time and legal compliance that goes beyond the additional cost.
To our readers: In your view, how big of a burden is COBRA administration for you? And do the premiums fall in line with the national averages or are they significantly higher or lower?
February 12th, 2009 at 3:46 pm
As a relatively small organization with few COBRA participants at any one time, the administrative burden is minimal. I rue the day, however, when we will be required to subsidize a portion of the insurance premiums for former employees. I am convinced that day is not too far away.
February 12th, 2009 at 3:54 pm
We are a smaller company in the central US and our insurance premiums are significantly lower for individuals. Up until this past year we paid another firm to administer our COBRA. When we did begin handling it ourselves, it took a lot of time to prepare and revise procedures and notices. Trying to keep track of the dates can be very time-consuming also. Luckily, we are a small company and have very few on COBRA so it’s not too bad once you get a system established. I’m not sure the additional 2% actually covers our time involved, but it’s still cheaper than paying another firm to handle it. That is, if you have the time and staff that are knowledgeable enough to handle it and keep your company in compliance.
February 12th, 2009 at 4:38 pm
It’s not really a big deal for us, but we don’t have a lot of insured employees to begin with and the ones that are don’t tend to leave us. The few that have, rarely elect COBRA. Premium cost would range from $132 for our youngest (single male) employee to $860 for a 40-year old female with 2 children. We have no employees who insure their spouses through us (we only contribute to the cost of premiums for employees and dependents. We cover spouses, but the premium is 100% employee responsibility), but if we did, the cost for a family would probably run around the average listed above, depending on the ages of the parents. Single employee coverage would fall a little below the averages shown above.
February 12th, 2009 at 4:53 pm
Our company pays 100% of our employees premiums (family included) so when the employee sees the price tag for COBRA, very few elect coverage. In fact, I can’t even get employees to return the form to me declaring or declining coverage. Our premiums for health alone (dental is separate) range from $255.45 for an individual to $1,029.63 for a family with a standard copay/deductible plan.
February 12th, 2009 at 4:56 pm
Our prices for cobra are less than a 1/2 of what they are saying.
Cobra is just another part of the job.
February 12th, 2009 at 5:19 pm
We are a small organization with very few COBRA participants, actually none at the present moment. Our premiums are significantly lower than the national average for single and considerably lower for family. I have a fairly inexpensive 3rd party administrator, ADP BeneDirect, because all it takes is one little mistake and it could mean big bucks. A third party administrator takes all of the emotion out of it. The peace of mind is worth the price. As I understand it, if in the future we are forced to subsidize a portion of COBRA premiums we get a tax credit for same.
February 12th, 2009 at 5:30 pm
We are a company with around 200 employees. The COBRA issue is a large burden for us even with the COBRA program we pay for from our Payroll Processing company. We’ve recently laid several people off and I feel very badly for them. The amount of their COBRA premiums is a little less than the norms that you state above but they are still very high…$400.00 for the individual and $850.00 for their families.
February 12th, 2009 at 6:35 pm
Our COBRA premiums are significantly lower for both individuals and families. Our COBRA administration is part of our package deal with our payroll provider — it’s too risky to try and handle it ourselves, with about 400 employees, and it’s well worth it to me to have someone else in charge.
February 13th, 2009 at 9:16 am
We are a small national, nonprofit with about 50 staff. Since we’re so small we administer Cobra ourselves and it isn’t a problem. Our individual rate is $420, substantially lower than the national average quoted. But our family rate is about $1300 per month.
February 13th, 2009 at 10:24 am
We’re a small NJ company offering 2 each, med/dent plans. Normally, we pay the full monthly amount for employee-only for the basic medical &/or basic dental plan. Any buy-up or dependents’ cost is paid by the E. Apparently, we’re below average national cost for individual but average cost for family.
We have very few on COBRA. Medical COBRA runs from $370 for basic and $436 for buy-up for employee-only and $1255/1467 for family. The dental runs from $16/40 for employee-only to $46/132 for family. Handling COBRA is part of the job. But thankfully, we’re small!
February 13th, 2009 at 12:09 pm
We have a little over 100 employees and our premiums are $450 to $500 for individual insurance, depending on the plan elected and $1300 to $1500 for family coverage. Our payroll service handles our COBRA administration, but it’s not integrated with our payroll system (frustrating), so it’s still a burden for us and it’s pricey considering the work we still have to do. Looks like it’s just going to get worse in the future. I’m not against allowing a terminating employee being able to keep their coverage…being out of work is stressful enough and maintaining coverage can help lift a huge burden for some people. It’s just the administrative burden that I dislike. It’s very time-consuming.
February 19th, 2009 at 3:59 pm
From what I hear, COBRA has little impact on the staff simply because it is very cost-prohibitive to choose COBRA. We’ve always had a TPA to handle it but have had few takers comparatively – even with layoffs.
February 19th, 2009 at 4:43 pm
I guess all of this is preet much a moot point now what with the new COBRA changes. I think we will see a lot more COBRA takers
February 20th, 2009 at 9:50 am
We are a self insured company and our COBRA rates are a lot lower for single coverage(about half) and family rates are about what the national average is. We currently bundle our health, dental and vision COBRA rates all together(if the departing employee had any or all coverages) is there anything in COBRA that says that you have to break out health seperate from the dental, vision rates. Karin’s comment got me thinking. Thanks for any input and GOD BLESS.
February 20th, 2009 at 10:15 am
Bob –
Don’t stress. The reason dental is broken out for us is that fact that we have differenct carriers. For cost purposes, it was cheaper to use United Concordia for dental and BCBS for health. Since I self administer COBRA, it is seperate paperwork. You should be just fine.
Have a great day.
February 20th, 2009 at 1:40 pm
individual cobra for our company would be $265.00 for medical and $30.00 for dental
family would be 745.00 medical and 85.00 dental
we have a small company so the paper work won’t be too much
p.s. we have great coverage even though we have a high median age. we switched to a large deductible then give our employees an hra card to cover it. we save alot of money this way
February 25th, 2009 at 10:32 am
We are a small home decorating company in MI and have approximately 83 employees. Compared to the national average, the costs are pretty consistent for families, but less for independent coverage. Currently, the cost for individual coverage under COBRA is $378.51 for our HMO plan and $464.62 for the PPO. Family coverage is $1,021.90 for the HMO and $1,287.99 for the PPO. About 30%-35% of seperating employees participate in COBRA. Due to the size of our company, COBRA administration is fairly minimal. My concern is that as a business already struggling with Finances and having to “front” the 65% of premiums, could result in us having to “do away” with our medical plans all together. I guess we will just have to wait and see.
February 26th, 2009 at 4:08 pm
Where can I find the definitive information I need to begin with the new COBRA compliance laws? I have called federal agencies and looked on websites and nothing is updated as actual fact. Thank-you.
February 26th, 2009 at 6:47 pm
Our company implemented a temporary lay off of approximately 400 employees last November. Our COBRA rates for health insurance range from $289 (single coverage) to $877 (family coverage). We have three plan options for our active and COBRA participants. We chose not to add the extra % to administer our dental COBRA, which rages from $28 (single coverage) to $96 (family coverage). We had a significant amount of laid off employees elect COBRA benefits. We do the administering of our COBRA benefits. We also worked with our broker to find alternative health and dental coverage. I have not heard how this worked for the employees who chose this option. Dealing with the extra work isn’t as hard as seeing how hard it is for our people to survive this economy.
May 21st, 2009 at 11:24 am
I have over 650 employees at this time, however used to be 850 back in October. I am also a HR dept. of one. I administer COBRA. Talk about a nightmare. I had to resend over 100 COBRA election notices for those we terminated from September through March. I do two kinds of COBRA elections-one for those terminated and one for those we switched from full-time to temporary status. COBRA premiums are above the national average depending on the plan. $343/491 to 1288/1844 for medical tiers and 14/44 to 35/110 for dental depending on tiers.We have a HDHP and a PPO for medical, two plans for dental, and one vision plan.