COBRA coverage is a sound health coverage option for your employees (and their dependents) when they experience a qualifying event. But it’s an expensive one, for both you and them. COBRA members pay 100% of the cost of COBRA, and you may see higher premiums when you have a higher number of COBRA members (since fewer elections can lead to fewer claims, which can reduce your overall cost).
One way to reduce your costs is to keep employees from being in a position where they need COBRA. Here are a few tips to help you reduce your COBRA enrollments.
Engage your employees
Employee termination (for any reason other than gross misconduct) is one of the more common events that leads to an employee becoming eligible for COBRA. One tactic to reduce employee terminations is to engage employees early and often so they’re more inclined to stay at your company.
According to one study, a toxic company culture, low salaries, and poor management are the top reasons employees want to quit their jobs. The factors leading to terminations might be different, but how do you know what’s negatively affecting your employees if you don’t ask? We have a few employee engagement ideas in this blog post.
Retention interviews are another great way to engage employees and learn more about what’s working for them and what isn’t. They’re one-on-one conversations between employees and HR that are modeled after exit interviews. Watch our podcast episode below to learn more about them.
An effective staffing strategy is at the heart of any successful business. Monitoring your staffing levels is ongoing because factors that lead to greater or fewer staffing needs at your business are constantly changing. Having too many – or even too few – employees can impact your bottom line and employee satisfaction. And having too much staff can lead to a greater likelihood of layoffs (which would create more qualified beneficiaries). So what can you do to avoid layoffs while also reducing qualifying events?
- Put a freeze on hiring for open positions.
- Reduce your temporary employee staffing.
- Revisit staffing levels regularly.
Offer COBRA alternatives
Providing alternative coverage options is a smart way for both you and your qualified beneficiaries to save money. They can shop customizable and affordable coverage options through a marketplace, choosing coverage that best fits their needs.
We offer our marketplace at no additional costs to our COBRA clients. Your qualified beneficiaries can shop for more affordable coverage on our marketplace that might better meet their individual needs. And the marketplace potentially saves you money and minimizes your risk, since the risk associated with alternative coverage claims is taken on by the provider members choose.
Would you like to learn more about COBRA at WEX? Check out our COBRA page.
The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own legal counsel, tax and investment advisers.
WEX receives compensation from some of the merchants identified in its blog posts. By linking to these products, WEX is not endorsing these products.