What is the difference
between Cobra and Cal-Cobra in
California
People typically use the word
"Cobra" to describe continuation
of California group health
insurance coverage for eligible
employees interchangeably for
both Cobra and Cal-Cobra.
There is a distinction between
the two and it's important to
know which you may be eligible
for.
From a Small Group employer's
standpoint, there are situations
where Cobra is not offered but
we recommend to our groups that
they offer all employees the
Cobra or Cal-Cobra option and
allow the employee to decide
whether or not to accept the
coverage. There is no
downside to the employer since
the employee will pay for the
premium of his/her own policy.
First, a quick summary on Cobra
, the original Federal
law that established the
continuation of coverage option,
and the distinction with
Cal-Cobra.
The Consolidated Omnibus Budget
Reconciliation Act (COBRA) is
federal law that extends your
current
group
health insurance
when you experience a qualifying
event such as termination of
employment or reduction of hours
to part-time status. The
extension period is 18 months
and some people with special
qualifying events may be
eligible for a longer extension.
To be eligible for COBRA, your
group policy must be in force
with 20 or more employees
covered on more than 50 percent
of its typical business days in
the previous calendar year.
Indemnity policies,
PPOs,
HMOs, and self-insured plans are
all eligible for COBRA
extension; however, federal
government employee plans and
church plans are exempt from
COBRA.
Individual
California health insurance
is also exempt from COBRA
extension, which may be another
reason to pursue participation
in group health plans, if
possible.
Cal-COBRA is California law that
has similar provisions to
federal COBRA. Essentially, it
extends the original Cobra
benefits which is typical for
California legislators.
With Cal-COBRA the group policy
must be in force with 2-19
employees covered on at least 50
percent of its working days
during
-
the preceding calendar year,
or,
-
the preceding calendar
quarter, if the employer was
not in business during any
part of the preceding
calendar year.
Eligibility for Cal-COBRA
extends to indemnity policies,
PPOs, and HMOs only.
Self-insured health plans
are not eligible. Unlike COBRA,
church plans are eligible under
Cal-COBRA. It is important to
note that both COBRA and
Cal-COBRA do not apply to
individual health insurance.
The Cal-Cobra Extention of
benefits for an additional 18
months (36 months total)
As of January 1, 2003, the
extension period for Cal-COBRA
has been changed from 18 months
to 36 months. If you become
eligible for Cal-COBRA after
January 1, 2003, you will have
the benefit of Cal-COBRA
coverage for a full 36 months
instead of the prior 18-month
coverage extension. California
Insurance Code (CIC) Section
10128.59 provides a similar
extension under Cal-COBRA for
those who have exhausted their
18 months on federal COBRA (or
longer in special circumstances)
for a total extension that
cannot exceed 36 months. For the
special Cal-COBRA extension to
apply, you must have become
eligible for COBRA after January
1, 2003, and the employer's
master policy must be issued in
California. If the group master
policy is not issued in
California, then the employer
must employ 51% or more of its
employees in California and have
its principal place of business
in California for their
California employees to take
advantage of Cal-COBRA.
COBRA is regulated by the
DOL-EBSA, and Cal-COBRA is
jointly regulated by the CDI and
the DMHC depending upon what
type of group coverage you have
(indemnity or HMO). These
agencies can provide further
information on the time frames
employers and insurance
companies/health plans must
follow to offer COBRA or
Cal-COBRA extension coverage for
eligible employees and their
dependents. Also, information
can be furnished on the actions
and responsibilities required by
employees to participate and
elect continuation of benefits
under COBRA or Cal-COBRA. When
experiencing questions or
problems with COBRA or
Cal-COBRA, you can reach the
appropriate state or federal
agency by referencing the
contact information available in
the resources section of this
brochure.
Important Points to Remember
About COBRA and Cal-COBRA:
-
COBRA is federal law that
extends your current group
health coverage after a
qualifying event. Individual
policies do not qualify for
COBRA.
-
COBRA law applies to group
policies in force with 20 or
more employees covered on
more than 50 percent of its
typical business days in the
previous calendar year.
-
Indemnity policies, HMOs,
PPOs, and self-insured plans
are COBRA eligible. Federal
government employee plans
and church plans are COBRA
exempt.
-
Cal-COBRA is California law
that closely follows federal
COBRA.
-
Cal-COBRA law applies to
group policies in force with
2-19 employees covered. Like
COBRA, individual policies
do not qualify for
Cal-COBRA.
-
Only indemnity policies,
PPOs, HMOs, and church plans
are Cal-COBRA eligible.
-
You can contact the DOL-EBSA
for questions regarding
COBRA law.
-
You can contact either the
CDI (on indemnity policies)
or the DMHC (on HMO/managed
care plans) for questions
regarding Cal-COBRA law.
Cobra tends to be pretty stable
but it's best to verify options
available from your carrier.
If you have questions on your
Cobra situation, please let us
know and we will try to provide
guidance.
Other
important
resources:
California
Small Group
health quote
California
Group
Enrollment
and
Eligibility
Center
