The COBRA Blog

COBRA Administration Outsourcing: Achieve Return on COBRA Investment

Posted by Robert Meyers on Tue, Feb 21, 2012 @ 10:02 AM

We’ve all heard of ROI, but are you familiar with the new acronym – ROO? It stands for “Return on Outsourcing.” It may not be on your business radar, but it should be. Faced with fierce competition and a fickle economy, many companies are honing efficiencies to gain a competitive edge. In many cases, that means focusing on your strengths and outsourcing your weaknesses … and outsourcing COBRA administration.

Is Your Company a Good Candidate for COBRA administration outsourcing?

If your human resource team faces any of the following circumstances, COBRA administration outsourcing may be advisable: 

  • Understaffed: If the job of COBRA falls on employees who already have many other responsibilities, they may not be adequately trained in COBRA. This could expose your company to the risks and costs of non-compliance. 
  • Workforce reductions or planned layoffs: If you’re planning big changes in the coming year, the resulting COBRA administration load may be daunting. 
  • Growth: In growing companies, HR teams must devote time to attracting and retaining employees. These companies may gain significant time and cost benefits from outsourcing. 
  • Risk adversity due to tight margins: Employers with tight margins may have difficulty absorbing the costs of non-compliance. Outsourcing to a professional firm with Professional Liability coverage provides budget stability and peace of mind. 
  • Jack-of-all-trades: If your COBRA administration is handled an HR generalist who also handles payroll, recruiting and host of other responsibilities, outsourcing may be a good idea. Expensive oversights easily occur with staff members have broad responsibilities and hectic schedules. It’s difficult to remember the nuances of a COBRA requirement if you only deal with it once or twice a year.

 

Is COBRA administration outsourcing worth the cost?

One of the biggest COBRA administration cost savings is with labor expense. Those who aren’t COBRA experts have to spend an excessive amount of time researching issues, finding forms, completing forms, and more. In fact, one survey estimated the average employer spent four hours on COBRA per participant, per month. If an employer outsources the process, the four-hour expenditure drops to about 20 minutes per employee, per month. By spending less time on COBRA, human resources professionals can devote more time to activities that impact the bottom line of the business.

Want to know more about COBRA administration outsourcing?

Download our free report, "In Search of ROO" to discover ...

  • How to leverage COBRA administration savings opportunities
  • Where you should never pinch pennies
  • The Return on COBRA Outsourcing (ROO) formula
  • What to do before you outsource COBRA administration

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Tags: cobra administration, cobraguard, COBRA outsourcing

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