Two people discussing their COBRA payment options

Why diverse payment options matter for your COBRA participants

In today’s digital landscape, providing a seamless and convenient payment experience is crucial to meet COBRA member expectations. Across our book of business Baker Tilly Vantagen receives less than 25% traditional “paper” payments and recurring ACH and credit/debit card payments have been adopted en masse.

Let’s delve into why having a variety of payment methods available can minimize disruption within your COBRA membership:

Ease of enrollment

When qualified beneficiaries have the intent to continue their employee benefits under COBRA, you want to ensure nothing stands in the way of completing the transaction. By offering multiple payment options including credit card, debit card, direct account debit and traditional payment methods, such as check or money order, you cater to the preference of the member and remove barriers to complete the COBRA enrollment. 

Expediting carrier activation

COBRA enrollment requires two actions from the qualified beneficiary: the expressed intent to enroll and the payment of premiums. Limiting payment methods may contribute to increased enrollment without payment scenarios. Members may hesitate to proceed or delay if their preferred payment option isn’t available.  

Catering to a wider demographic

Different consumers have varying preferences when it comes to payment gateways. Some may prefer traditional checks or money orders, while others lean toward newer options like automated ACH. By accommodating these preferences, you appeal to the breadth of members that experience COBRA qualifying events and require the coverage. 

Enhanced member perception

When customers see multiple payment options available, it signals professionalism, trustworthiness and security of their COBRA enrollment and maintenance experience. A well-rounded payment system reflects positively on your employer brand and how you operate your benefits program. 


Health insurance premiums can strain a household budget. By offering a variety of payment methods and providing varying methods of payment options throughout the permitted COBRA grace periods, you reduce the risk that a member’s payment will lapse simply due to having limited payment options. Offering a variety of payment methods ensures that the member can make payment promptly without disruption. 

What's next?

Understanding the payment options that are available to your plan participants ensures you aren’t caught off guard when an urgent situation arises. Some questions you may want to present to your COBRA administrator include:

  • Please provide me with a sample of the COBRA election notice. Does it include enrollment instructions?
  • What payment options are made available and how are they communicated?
  • Are there forms of immediate payment that are available to the member?
  • What types of payment notices (monthly premium bills, coupons, late payment reminders) are sent to the members on COBRA?
  • What happens if someone enrolls but does not pay?

In summary, ensuring your COBRA administrator offers an adequate variety of payment methods isn’t just about convenience; it’s a strategic move that impacts your members’ COBRA experience and reduces friction within the COBRA enrollment process. By offering flexibility, your plan creates a positive enrollment experience, building trust with an audience that is prone to sensitivities. A well-rounded payment system benefits all parties involved – the member, the employer, the insurers and the administrator.

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