Rethinking COBRA: How Smarter Elections Drive Savings for PEOs

Guest Blog by Elizabeth Hughes, Vice President of Partnerships, ThrivePass

COBRA has traditionally been treated as a compliance requirement, a box to check when employees leave. But with the right approach, it can be a meaningful device for cost savings and a better member experience. 

At a time of rising benefit costs and evolving legislation, Professional Employer Organizations (PEOs) have a real opportunity to guide smarter COBRA decisions that benefit both the organization and its people. 

Why This Matters: 

COBRA enrollees can cost around $10,000 per plan, even after premiums. And with typical election rates between 12–15%, that adds up quickly. 

PEOs that implement COBRA decision enablement, using tools that compare COBRA and Marketplace plans, are seeing election rates fall and member satisfaction rise. It’s a small shift that creates significant financial and human impact. 

When Employees Make Coverage Decisions: 

When a qualifying life event (QLE) like job termination occurs, employees are offered Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage. But in that moment, most people don’t understand their full range of options.  

This is often a period of high stress and uncertainty. Without help, employees are left to navigate more than 800 Marketplace plans alone. That’s why it’s critical to offer decision support when the coverage decision is being made.  

What Are Decision Enablement Tools? 

Decision enablement in the COBRA process is about equipping employees to make informed choices, not just defaulting into COBRA coverage. 

An effective solution does three key things: 

1. Compares COBRA and Marketplace plans side-by-side. 
2. Provides details ensuring the member understands their options. 
3. Enables members to easily and confidently enroll in Marketplace plans without going to another website. 

When PEOs implement tools that provide this level of insight, employees are more likely to enroll in lower-cost, better-fitting Marketplace plans. A win-win for all parties. 

Following the Member Journey 

Imagine this scenario:  

An employee opts into a Marketplace plan after comparing options with decision enablement. They’re confident about their coverage and relieved to avoid COBRA’s higher premiums.  

Now consider the longer-term ripple effects:  

• They already have an HSA and thought they’d have to pause it.  
• However, recent legislative updates are changing that. For the first time, select Marketplace plans will support HSA contributions. That means the member can continue contributing and maintaining their long-term savings strategy even between jobs. 
• Now that they’re covered and thinking ahead, they explore Direct Primary Care (DPC) to maintain access to their doctor at a fixed monthly rate. 
• And in 2026, another shift takes effect: HSA funds can be used to pay monthly DPC membership fees. This further reduces friction and opens the door to more affordable, consistent care during transition periods. 

All of this started with a supported, informed decision. That’s what decision enablement unlocks.  

The Takeaway 

Currently, COBRA plans can cost up to 25% more than Marketplace alternatives. Without decision enablement, employees often default to COBRA—missing out on better options, while employers/PEOs absorb unnecessary costs.  

PEOs that guide smarter elections can reduce costs, improve outcomes and build trust with members when it matters most.  

About ThrivePass
 

ThrivePass offers a modern, tech-forward approach to COBRA decision enablement. We help PEOs lower COBRA election rates, support members through transitions and drive real savings—without compromising care.  

Elizabeth Hughes leads the Partnerships Team at ThrivePass, a technology-first administrator for Pre-tax, COBRA and Lifestyle Spending Accounts. Elizabeth’s team collaborates with and supports Partners such as PrismHR, health plans, wellness solution providers and PEOs. Elizabeth is a New England native and graduate of Wentworth Institute of Technology in Boston. Elizabeth had  worked with the current CEO of ThrivePass, Ryan Tacke, who asked her to lead the Partnerships Team in 2022. Elizabeth and her team have shaped their solution for PEOs and continue to evolve their technology based on the specific needs of PEOs to offer modern benefit solutions. Elizabeth is passionate about ensuring her partners have the right technology to help members access their healthcare benefits.