The Spencer’s Benefits Reports survey of employers’ 2003 experiences under the Consolidated Omnibus Budget Reconciliation Act ( COBRA) found that about 52% of the companies had COBRA costs between 100% and 200% more than active costs – up from 49% in 2002, a news release said. Meanwhile, 23% had COBRA costs that were more than two times active employee costs – up from 18% in 1999. Some 25% reported COBRA costs that were lower than active worker costs (33% in 2002).
The average annual health care cost for the companies that reported costs averaged $5,721 per employee/participant. This is 16% higher than two years ago ($4,927 in 2002). COBRA costs in the 2004 survey averaged $8,353 per year, 12% higher than two years ago.
The Spencer’s research found that 7.6% of employees and dependents became eligible for COBRA continuation of coverage and 20.4% of those eligible actually elected the health coverage offered.
The Spencer’s announcement said the latest survey also identified the following five primary COBRA difficulties:
- cost of coverage, both for the employer and the employee
- collecting premium payments
- keeping up with the recordkeeping burdens associated with continuation of coverage
- notifying employees and other beneficiaries and being notified of COBRA eligibility and changes
- communicating the plan to participants and beneficiaries.
The 173 companies responding to the 2004 survey administered COBRA for 25,638 former employees and dependents.
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