OVERLAND PARK, Kan., May 28, 2014 /PRNewswire/ -- COBRAGuard has long been recognized as a national leader in COBRA benefit enrollment and benefit eligibility administration. Now, at home in Kansas, the company that serves HR professionals is raising the HR bar with life-changing financial education for its employees.
The idea was sparked last year, when the company noticed that a number of employees had loans on their 401(k) plans. Company President Robert Meyers explains, "When we initiated our 401(k) match, our goal was to help employees prepare for retirement. That was a good step forward, but we realized that more was needed. We also needed to help employees succeed in the short term with personal finance best practices."
After consulting with the Dave Ramsey organization, Meyers learned that 401(k) loans are not uncommon. In fact, according to a 2011 Fidelity Investments Survey, nearly 1 in 4 of Fidelity's 401(k) accounts have loans against them. And a 2010 U.S. Department of Labor report indicates that employees use 60 cents of every dollar companies spend on match contribution for non-retirement needs.
According to Ramsey's teachings, the root problem behind this trend is premature retirement savings contribution. Ramsey believes that BEFORE individuals save for retirement, they must first establish an emergency fund and eliminate short-term debt. After all, without an emergency fund, many employees have no other option than to borrow from their retirement savings when unexpected costs arise.
So, in November 2013, COBRAGuard launched a plan to make a lasting financial difference in the lives of its employees. The company announced its sponsorship of a Dave Ramsey course, known as CORE. Under the program, COBRAGuard would pay 50 percent of the cost of the course, and $500 toward each employee's emergency fund upon course completion. "We weren't sure if employees would participate, since it meant spending $99 of their own money for something they may perceive as non-essential, but we felt it was very important that they have some skin in the game," Meyers says.
Remarkably, the COBRAGuard program garnered 100 percent employee participation – significantly higher than typical. And, in the six months since its launch, 22 of 28 employees have already graduated from the program and earned their $500 emergency fund contributions. In total, between employee and employer contributions, the team has accumulated $22,000 in their personal emergency funds this year, which is pretty remarkable.
Meyers is thrilled with the results, and hopeful that this financial education helps his team make peace with their finances. "Everyone is so pumped about this program and appreciative of the opportunity to gain new financial skills," he says.
About COBRAGuard Inc.
COBRAGuard Inc. is a certified COBRA administrator (CCA), helping employers control risks and liabilities, prevent adverse claims, and save time and money. In recent years, the company has expanded to also provide enrollment and eligibility administration. For more information, visit cobraguard.net.
Contact: Robert Meyers
- Employment & Career