COBRA participants have to pay for coverage, but there’s no reason they should have to pay by check. By offering ACH and credit card payment options, COBRA administrators can keep participants happy and reduce their workload. If you’re not offering digital payment options for COBRA yet, it’s time to change this.

Paper Checks Have Fallen Out of Favor

Paper checks used to be a common payment method, but times have changed. According to Yahoo, only 55% of Americans wrote a check in the last year. Younger Americans are even less likely to use checks – only 43% of people in the 18-to-24 age bracket say they have written a check in the past year.

It’s no wonder checks have fallen out of favor:

  • Paying by check takes a lot of time. U.S. priority mail delivery typically takes one to three days. You’ll also need to allow time for the check to clear, which can add several more business days. Plus, there’s always a chance the check will never arrive if it gets lost in the mail.
  • Some people may not have checks on hand. Since checks are no longer a common payment method, some people may not bother ordering them.
  • Check fraud is a growing problem. Criminals can steal checks sent through the mail and alter them to divert the funds to their own bank accounts. AP News warns that cases of check fraud have increased dramatically, and Americans are being told to avoid mail checks when possible. In 2022, banks reported approximately 680,000 cases of check fraud – up from 350,000 in 2021. As a consequence, many people don’t feel comfortable sending checks through the mail anymore.

Electronic Payments Are the Secure, Convenient Option

ACH and credit card payments offer many advantages over paper checks. COBRA participants and administrators alike can benefit from the convenience.

  • COBRA participants don’t have to deal with the hassle of paper checks. As most people have become accustomed to paying for items using credit cards or ACH, they prefer this convenient option – this is indicated by high participation rates. Participants can also rest easy knowing their bank account is safe from mail fraud and their payments are being processed in PCI DSS-compliant online gateways.
  • COBRA administrators don’t have to deal with the hassle of processing paper checks. Entering check information is tedious, and human errors are inevitable. NSF checks and returned payments are another potential downside. In contrast, participants make ACH and debit card payments directly online with instant payment authorization. This ensures COBRA administrators avoid data entry errors and bad checks.

Electronic Payments Are Cost Effective

COBRA administrators need to think about their bottom line. The good news is electronic payment options can be highly cost effective.

  • Time is money. ACH and debit card payments save administrators time by allowing COBRA participants to make payments through their online accounts, thereby reducing the data entry and processing requirements. When they have more time, administrators can focus on other tasks that bring in additional revenue.
  • You can pass on the processing fee. Employers and COBRA administrators can pass on the processing fee to the COBRA participants. This fee is added to the monthly payment. Many COBRA participants are willing to pay this fee because they don’t want to deal with the hassle of paper checks.

Digital Payment Options Support Continued Enrollment

With paper checks, last-minute payments aren’t an option. With credit card and ACH payments, however, last-minute payments are possible. This can help participants make payments before the grace period ends to ensure they stay enrolled. Plus, electronic payment methods eliminate the risk of checks getting lost or stolen while in transit – a situation that can lead to late payments, COBRA cancellation, and disputes.

Travisoft is pleased to be partnering with to offer benefit administrators another option for digital COBRA payments. COBRA participants can enroll to pay their COBRA premiums via credit card or ACH and there’s an option for the administrator to collect a processing fee. Learn more.