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The first step in finding out if you may keep your employer's group coverage when you are in danger of losing it is to see if you are eligible for either federal COBRA or Cal-COBRA. Federal COBRA applies to employers who have 20 or more employees. It is governed by federal law. (For additional information about Federal COBRA, use the contacts listed below.) Cal-COBRA is available under California law and applies to employers who have 2 to 19 employees.

The Department of Managed Health Care is responsible for seeing that health maintenance organizations (HMOs or health plans) in California provide Cal-COBRA coverage as required by law.

The idea of Cal-COBRA is to provide the same general advantages to small groups in California as federal COBRA provides to larger groups. The main advantages are: (1) the right to keep your group coverage under certain conditions when it might otherwise end, and (2) the right to keep nearly the same premium rates as the employer group has. The important difference in premiums is that your employer will no longer be making a contribution to the payment, and you will have to pay the entire premium yourself.

Who Can Enroll in Cal-COBRA
Who Cannot Enroll in Cal-COBRA
Benefits Under Cal-COBRA
Choosing to Have Cal-COBRA
The Time Period for Continuing Coverage under Cal-COBRA
A Small Employer's Responsibilities Under Cal-COBRA
When Cal-COBRA Ends

Who Can Enroll in Cal-COBRA

In order for someone to enroll in Cal-COBRA one of the following things, called "qualifying events," has to happen:

  • Loss of coverage because employment of the covered employee ends (unless employment ends because of gross misconduct of the employee), or loss of coverage because the hours of the covered employee's employment are reduced
  • Loss of coverage because of divorce from the covered employee
  • Loss of coverage because one is no longer a dependent of the employee under the group plan
  • Loss of coverage because the covered employee has become eligible for Medicare
  • Loss of coverage because of the death of the covered employee

Who Cannot Enroll in Cal-COBRA

You are not eligible for Cal-COBRA if you are one of the following:

  • Eligible for Medicare
  • Covered by another group health plan, unless:
    1. that other group health plan has a pre-existing condition exclusion or limitation that applies to you, or
    2. that other group health plan is a group conversion plan (basically the offer of an individual plan) that you choose not to accept
  • Terminated from employment because of gross misconduct
  • Someone who fails to choose Cal-COBRA in writing when it is available
  • Someone whose allowed eligibility period has been used up

Benefits Under Cal-COBRA

Anyone covered under Cal-COBRA has the same benefits as active covered employees. If active employees have open enrollment periods when they can change from one plan to another, Cal-COBRA enrollees may do the same. If the employer changes the employees from one plan to another, the Cal-COBRA enrollee must be allowed to transfer into the new group along with active covered employees. No restrictions based on pre-existing conditions are allowed. If the group plan offers special coverage, such as dental or vision coverage, that must be provided to the Cal-COBRA enrollee as well.

Choosing to Have Cal-COBRA

If your employment ends or your hours are reduced, your employer must notify both you and the health plan that a qualifying event happened. If you have any other qualifying event, you should notify both the employer and the health plan. Within 60 days of the qualifying event, you must notify the health plan in writing that you want to enroll in Cal-COBRA. The 60 days do not start to run until you receive notice that Cal-COBRA is available.

The health plan then must send you a premium notice and information about completing the enrollment. (There may be a part of the group contract that requires the employer rather than the plan to send you the notice.) The booklet that explains your health plan benefits, called an Evidence of Coverage, contains information about Cal-COBRA as well.

Premiums must be paid when due. There is no break in your coverage if you enroll and pay on time.

The Time Period for Continuing Coverage under Cal-COBRA

If a former employee gets Cal-COBRA coverage because employment ended or because working hours were reduced, Cal-COBRA for the former employee, spouse, and dependents may continue for up to 18 months.

If the former employee's spouse or dependent gets Cal-COBRA coverage because of any of the following reasons, their coverage may continue for up to 36 months:

  • death of the former employee
  • divorce from the former employee
  • the former employee becomes eligible for Medicare
  • the dependent is no longer considered a dependent under the group plan

Certain people found eligible for Social Security Disability may be eligible for up to 29 months.

A Small Employer's Responsibilities Under Cal-COBRA

Small employers have a duty to do all of the following under Cal-COBRA:

  • Notify the health plan in writing, within 30 days of termination or reduction in hours, that the person is eligible for Cal-COBRA
  • Refer the eligible person to the health plan to start the Cal-COBRA coverage or manage the enrollment for the person
  • In case the employer changes from one health plan to another group plan, it must promptly notify all persons currently on Cal-COBRA that they have a right to continue coverage with the new group plan. The employer must also give the new group plan the names of all persons on Cal-COBRA so the new plan can offer the coverage as it is required to do.

When Cal-COBRA Ends

Cal-COBRA will end as soon as one of the following happens:

  • The time period stated in the law passes (usually 18 or 36 months)
  • Premiums are not paid when due
  • The covered person moves outside the health plan's service area
  • The employer no longer offers any health coverage to its employees
  • The covered person becomes eligible for Medicare
  • The covered person enrolls in another group policy

If the end of Cal-COBRA comes because the legal time period has been used up, the health plan must notify the enrollee when the end of coverage is coming. It must offer any additional continuation benefits that might be available under Senior COBRA. If Senior COBRA is not available, the plan must determine if the enrollee is eligible for individual coverage under HIPAA. Finally, if the enrollee is not eligible for one of these programs there may be conversion rights that are available through the plan.

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with professional advice. Information is subject to change without notice.

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