Large employers are usually self-insured. The insurance company just manages the plan, but the employer actually pays the medical claims out of pocket.
Offering indefinite COBRA means absorbing massive medical risk for people who no longer work for you and aren't providing value. Healthy ex-employees leave COBRA quickly for cheaper coverage, while those with heavy medical expenses stay as long as possible—so the company gets stuck paying for high-cost claims while only collecting basic premiums.
While some companies let retirees buy into a group plan, that's an earned perk to reward long tenure. Indefinite COBRA would give that same lifetime benefit to anyone, even if they worked there for only six months.
> Large employers are usually self-insured.
They can choose to not be self-insured as well. This needs to be based on what is best for employees, not corporations.
Good question, and why limit this question to Microsoft? Why does COBRA have an 18-month limit? There should be no time limit to COBRA at all, especially if you have been with the same employer for many years. The law needs to be updated. Contact your elected representative.
For example https://www.wahealthplanfinder.org/HBEWeb/Annon_ShowIndividu...
First of all, it is not cheaper. It may be cheaper for young people because ACA marketplace rates are age dependent while COBRA rates are not. It is not cheaper if you are over a certain age, it is significantly more expensive.
Secondly, many ACA marketplace plans have narrower networks. (Which doctors are in-network doesn't only dependent on the insurance company, it also depends on the network, and insurance companies have multiple networks.) In WA, check out Regence's network for ACA plans--most hospitals are excluded, while their regular plans include them.
Unlike COBRA which almost always includes out-of-state doctors and hospitals, ACA networks don't. If you get a rare disease for which the expert doctor is in another state over you're out of luck.
And lastly, ACA rates just went up 20% in many states. If you are a couple in your 60's, you will pay nearly $45,000 for health insurance and then pay $7,000 each in deductible before insurance kicks in. At these rates, most healthy people will decide to forgo insurance. Which will reduce insurance company profits, who will then raise rates even more. This is a death spiral, and ACA will collapse (which is a desirable outcome as far as the current admin is concerned).
ACA is sometimes cheaper though! Depending on your age, and your income, and whatever politicians in your state are doing to throw sticks in the spokes (not that the ACA really needs any help to collapse, given what an intentionally-compromised, politicized mess it's been from the beginning).
I just wish that we could do a full redo of health-insurance portability with these simple changes: COBRA with zero time limits, and you can choose to apply whatever number of dollars the government(s) would use to subsidize an ACA plan for you, towards COBRA premiums instead. Next, allow employers to offer you pretax premium subsidies to use to pay for COBRA insurance from your former job so that if you take a new job you don't have to change insurance unless you want to.
I'm assuming health insurers would deeply hate all of that, since the upshot from all that is they'd have to compete with each other in the consumer market! They do compete today of course -- to get contracts from employers, but employers have far different interests than humans do.