At Alegeus, we believe partnership is power. Our mission is to equip third-party administrators (TPAs) and employers with the tools and insight needed to support consumers across every stage of their benefits journey. Nowhere is that more important than in the evolving world of COBRA administration.

For nearly a decade, the Affordable Care Act (ACA)’s premium subsidies have provided stability in the health coverage landscape, helping many maintain access to care during transitions such as job loss or divorce. As these enhanced subsidies approach their scheduled expiration at the end of 2025, the coverage marketplace may be heading for another shift. Historically, when affordability tightens, interest in COBRA often increases.

Before the ACA, COBRA was often the only way for people to maintain coverage during a qualifying event. Those who lost employer-sponsored plans faced a choice: continue their plan at full cost or risk exclusion from new coverage due to pre-existing conditions. In that environment, COBRA election rates ranged from roughly 15 percent to one-third of qualified beneficiaries.¹

The ACA’s launch in 2014 created new health insurance marketplaces and introduced subsidies to make individual coverage more accessible. Later enhancements under the American Rescue Plan Act and Inflation Reduction Act temporarily made Marketplace premiums even more affordable. With those enhancements scheduled to sunset, COBRA participation could trend back toward pre-ACA levels as some individuals choose to stay with a familiar coverage option.

Losing employer-sponsored coverage can be disruptive. Marketplace plans may offer lower premiums, but high deductibles or plan changes can make them feel difficult to navigate during a transition. COBRA offers continuity and avoids changing providers or resetting deductibles, though often at a higher monthly cost. These trade-offs mean decisions are shaped by more than price alone.

If COBRA participation rises, TPAs and employers will play a central role in helping individuals understand their options. Clear communication and accessible tools can make complex decisions easier.

That means:

1. Guiding participants through complex decisions with care and clarity

Alegeus’ COBRA tools support TPAs in offering participants clear guidance as they make coverage elections and payments. The intuitive, shopping cart–style experience is designed to help individuals understand their options and select coverage that aligns with their circumstances. For example, covering only the family members who need continuation coverage may be more cost-effective than electing full-family coverage.

2. Offering reassurance alongside procedural guidance

Effective COBRA administration requires more than accurate processing. Alegeus’ roadmap for AI-driven tools and structured communication is focused on helping TPAs explain requirements and options in a straightforward, useful way. Participants understand why choices exist and how each option works.

3. Simplifying the complex

Transitions are challenging, and administrative complexity can add stress. Alegeus supports TPAs by streamlining steps from election to payment to open enrollment and carrier integration through automation and structured workflows.

For TPAs, improving the participant experience is both practical and responsible. When individuals understand their choices and feel supported, they are better equipped to stay on track with required actions and coverage timelines.

Alegeus designs its solutions to help TPAs expand their operational efficiency and service consistency in the changing COBRA landscape.

The phase-out of ACA subsidies presents both a challenge and an opportunity. For TPAs and employers, it is a moment to strengthen COBRA administration as a reliable support mechanism during periods of transition.

Alegeus works with partners to navigate this next era of COBRA with a platform that focuses on intelligent automation, educational engagement, and human-centered design.

Sources:

¹ Spencer’s Benefits Reports | ² Business Insurance / Hewitt Associates | ³ U.S. Treasury review | ⁴ Congressional Research Service