Employers could save billions next year as some of their former employees opt to discontinue their coverage under the Consolidated Omnibus Budget Reconciliation Act and purchase coverage through the new health insurance exchanges instead, according to a Kaiser Health News report.
Next year, 41 percent of large businesses expect former employees eligible for COBRA coverage to decide to buy health plans on the exchanges formed under the Patient Protection and Affordable Care Act instead, according to a recent survey conducted by the National Business Group on Health.
Steve Wojcik — NBGH's vice president of public policy — told Kaiser the heavily subsidized exchange plans will hold more appeal for many people than paying full price for COBRA. There were an estimated 2.6 million COBRA beneficiaries in 2011, according to the federal Agency for Healthcare Research and Quality.
Company cost-sharing usually stops along with employment, so former workers pay premiums of more than $5,000 annually for individual coverage, according to the report. Because of the expense, only people who truly need the coverage enroll, and therefore they're usually sicker than average. This leads to losses for corporations that pay their own medical claims, according to the report.
Before the employer mandate was delayed until 2015, large employers expected their employee healthcare benefit costs to increase by 7 percent on average in 2014, despite former workers opting to obtain coverage through the exchanges instead of COBRA, according to the National Business Group on Health.
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