The Ripple Effect – The Hidden Cost of COBRA Coverage
November 26, 2024
When it comes to health insurance, there are laws in place designed to protect consumers, such as the Affordable Care Act (ACA) and COBRA regulations. These laws mandate that former employees, through COBRA, should be able to continue their group health insurance at the same rates as active employees, plus a small administrative fee.
However, my recent experience with Rippling’s COBRA administration revealed practices that directly violate these protections. What Happened? As a COBRA participant, I was shocked when Rippling’s renewal notice for my health plan quoted a staggering premium of $5,120 per month!
This represented nearly three times the cost of my previous coverage ($1,788/month). Assuming there was a mistake, I reached out for clarification. The response from Rippling revealed a troubling practice: instead of maintaining the group health plan structure as required by law, Rippling admitted to pooling COBRA participants separately. They applied a uniform rate increase to this isolated group, justifying it by citing “higher healthcare utilization within the group.” This practice violates the ACA and COBRA’s explicit requirements to treat COBRA participants the same as active employees in terms of coverage and cost.
Why This Matters
The ACA and COBRA regulations were enacted to ensure continuity of care without penalizing individuals for losing employer-sponsored coverage. By grouping COBRA participants separately, Rippling undermines these protections in two ways:
1. Exorbitant Premiums: Artificially inflated premiums discourage individuals from continuing group coverage, forcing many to seek less comprehensive (or no) coverage elsewhere.
2. Violation of Federal Law: The law is clear: COBRA participants must be offered the same plan at the same rates as active employees. Grouping them separately creates a de facto discrimination against former employees.
The Ripple Effect
Rippling’s actions do not just affect one or two individuals—they harm all COBRA participants in their system. By creating a separate risk pool, they prioritize corporate profits over legal compliance and participant welfare. Worse, their suggestion to “explore individual exchange coverage” highlights their attempt to offload responsibility rather than correct their practices.
What Needs to Change
Rippling’s handling of COBRA is a textbook case of why robust consumer protection laws like the ACA exist. Companies administering COBRA must:
1. Follow the Law: Ensure COBRA participants receive the same coverage at the same rates as active employees.
2. Increase Transparency: Clearly disclose how rates are calculated and ensure participants understand their rights.
3. Be Held Accountable: Regulators must investigate and penalize non-compliance to prevent future abuses.
Your Voice Matters
If you or someone you know has been affected by similar practices, share your story. It is only by shining a light on these violations that we can push for meaningful accountability and reform.
Together, we can ensure that companies like Rippling adhere to the standards set by law. This experience serves as a stark reminder that even in a system designed to protect consumers, vigilance and advocacy are essential.
Let’s hold the industry accountable to ensure fairness for all.
