Cal-COBRA: Program Description

This California law requires employers of 2 to 19 employees to ensure employees and their dependents the right to continue health coverage when a qualifying event occurs. Cal-COBRA, for small groups, is similar to the national provisions of COBRA and OBRA combined.

The Cal-COBRA bill was passed by the California Assembly in 1997. This law requires employers of small groups to continue health coverage that otherwise would be terminated.

An individual, along with spouse and dependants, becomes eligible for Cal-COBRA through a qualifying event. The following are specific circumstances that would terminate an individual’s employer-sponsored group health coverage and may be considered qualifying events for Cal-COBRA.

Voluntary or involuntary termination of employment for any reason other than gross misconduct.
Voluntary or involuntary reduction in work hours below the minimum number of hours required to qualify for group health coverage.

Voluntary or involuntary termination of the covered employee's job for any reason other than gross misconduct.
Covered employee is subject to a reduction in work hours below the minimum number of hours required to qualify for group health coverage.
Covered employee becomes eligible for Medicare and no longer qualifies for the group health plan.
Covered employee and spouse divorce or become legally separated.
Death of the covered employee.

Coverage is subject to the same rules as for spouses until the child reaches the age at which the child no longer qualifies for coverage under the parent’s group health plan.

An individual terminated from employment due to gross misconduct (such as arson or embezzlement) is not eligible for Cal-COBRA.

Cal-COBRA requires that eligible employees receive the same health insurance benefits that the employer provides to the current work force.

It provides benefits for a maximum of 18 months for the employee (other time periods apply for spouses and children).

For the first 18 months, the employee is responsible for paying 110% of the total health insurance premium the employer has been paying.

For qualifying events occurring before January 1, 2003, if an individual is disabled, the total period can be extended to a total of 29 months with the individual responsible for paying a premium maximum of 150% for an additional 11-month extension.

For qualifying events occurring on or after January 1, 2003, Assembly Bill No. 1401 extends Cal-COBRA coverage by an additional 18 months giving individuals a total of 36 months of coverage or until Medicare eligible. With AB 1401 the individual continues to pay 110% of the premium payment, rather than 150% with Cal-COBRA's 11 month extension.

The above amounts include the portion of the premium that the employer may have previously paid.

The employer is responsible for providing a Cal-COBRA notice (application) within 30 days of the qualifying event.

The employee has 60 days from the date of the qualifying events to elect Cal-COBRA coverage and begin paying premiums.

The employee has an additional 45 days from the date of Cal-COBRA election to pay any premiums that became due before electing Cal-COBRA.

An individual may be eligible for Cal-COBRA if a reduction in work hours leaves the employee ineligible for coverage under the employer's group health insurance plan.

During Cal-COBRA, premiums and insurance carriers are subject to change if changes are made to the employer's group health insurance plan for the current work force.