Employers Adminstering COBRA: do you accept premium payments via credit card? What are pros and cons?

[Guest sarikfan]

We are frequently asked by our employees to accept credit card payment for COBRA premiums (also for payment of benefit premiums during leaves of absence). We administer COBRA (and leave billing) internally.

Do you have any experience with this? What are the caveats? The positives?

We are a BIG employer: around 150,000 benefits-eligible employees nation wide.

Thanks for your thoughts.

[oriecat]

We don't do it at this time. I did have one person ask last fall and started to look into it, but never really got around to it... she went off the plan anyway, no one else has asked.

One con would of course be the service fee from the credit card company. I don't know how much those run, and if you're charging the full 2% then maybe it would just be an offset.

I know for us, we could have to run it through with our customers purchases, so then there would be an issue for moving the funds around into the proper places, which could be an accounting hassle.

[jsb]

We don't permit it. Any bank fee would likely be more than your 2%, and then you still have to pay the carrier. Suggest that the person could go and get a cash advance with the credit card. When they complain about the fees and/or service charges, reply "Exactly why we can't take them."