How COBRA Can Handcuff Your Business

Who really benefits from COBRA Continuation? Often, it’s those with high ongoing medical needs—posing serious risk to your business. Healthy individuals rarely opt in, creating a scenario of adverse selection.

One real-world example:

A young couple pursued fertility treatment by accessing COBRA after just 30 days of employment. The result? Over $2 million in medical claims in year one alone. Now, the employer—despite employing them for only 30 day—is left to absorb the fallout, likely through skyrocketing premiums and suppressed wages for the rest of the team.

With ACA Marketplace coverage now guaranteed through Special Enrollment, is COBRA still worth the risk?

A smarter solution? Consider switching to a Defined Contribution model like ICHRA—giving employees choice, and employers protection.

Want to learn more about reducing risk and improving benefit sustainability? Let’s talk.