Key Takeaways
- Federal COBRA applies to employers with 20 or more employees, requiring 18-36 months of continuation coverage
- Cal-COBRA applies to employers with 2-19 employees and extends federal COBRA to 36 months total
- Employees must elect continuation coverage within 60 days of receiving notice and pay within 45 days
- Cal-COBRA premiums cannot exceed 110% of the full premium (compared to 102% for federal COBRA)
- California law prohibits insurers from denying Cal-COBRA for pre-existing conditions
California COBRA and Cal-COBRA Continuation
California provides extensive continuation coverage through both federal COBRA and state Cal-COBRA laws, ensuring employees can maintain health coverage after losing group coverage.
Federal COBRA Requirements
Who COBRA Applies To
Federal COBRA applies to:
- Private sector employers with 20 or more employees
- State and local governments
- Churches with 20+ employees (if elected COBRA)
COBRA Does NOT Apply To
- Employers with fewer than 20 employees (Cal-COBRA may apply)
- Federal government (separate rules)
- Some church plans
Qualifying Events and Coverage Periods
COBRA Qualifying Events
| Qualifying Event | Maximum Period |
|---|---|
| Termination of employment (not gross misconduct) | 18 months |
| Reduction in hours | 18 months |
| Employee's death | 36 months (dependents) |
| Divorce or legal separation | 36 months (spouse/dependents) |
| Employee becomes Medicare eligible | 36 months (dependents) |
| Child loses dependent status | 36 months (child) |
Disability Extension
| Situation | Extension |
|---|---|
| SSA disability determination within 60 days | 29 months total |
| Second qualifying event during period | 36 months total |
Exam Tip: COBRA's basic period is 18 months for termination/reduction in hours, but 36 months for events affecting dependents (death, divorce, Medicare eligibility, loss of dependent status).
Cal-COBRA Requirements
Who Cal-COBRA Covers
Cal-COBRA provides continuation coverage for:
| Coverage | Details |
|---|---|
| Employer Size | 2-19 employees |
| Products Covered | Insured group health plans |
| Who's Eligible | Employees, spouses, domestic partners, dependents |
Cal-COBRA Features
Cal-COBRA Basics
| Feature | Requirement |
|---|---|
| Duration | Up to 36 months |
| Premium | Up to 110% of full premium |
| Coverage | Same benefits as group plan |
| Pre-existing Conditions | Cannot be denied or excluded |
Cal-COBRA vs. Federal COBRA
| Feature | Federal COBRA | Cal-COBRA |
|---|---|---|
| Employer size | 20+ employees | 2-19 employees |
| Maximum premium | 102% | 110% |
| Basic period | 18 months | 36 months |
| Extended period | Up to 36 months | Already 36 months |
Cal-COBRA Extension for Federal COBRA
Important: Cal-COBRA can extend federal COBRA:
- After federal COBRA's 18 months expire
- Cal-COBRA extends to 36 months total
- Must elect within 30 days of COBRA expiration
- Premium increases to 110%
Notice and Election Requirements
Employer/Insurer Duties
| Requirement | Timeframe |
|---|---|
| Initial notice | When first enrolled |
| Qualifying event notice | Within 14 days |
| Election notice | Within 14 days of qualifying event |
Employee/Beneficiary Duties
| Requirement | Timeframe |
|---|---|
| Report divorce/separation | Within 60 days |
| Report child losing status | Within 60 days |
| Elect continuation | Within 60 days of notice |
| Pay initial premium | Within 45 days of election |
| Pay ongoing premiums | Within 30 days of due date |
Exam Tip: The key deadlines are 60 days to elect coverage, 45 days to pay the first premium, and 30 days for ongoing payments.
Premium Comparison
Federal COBRA Premiums
| Situation | Maximum Premium |
|---|---|
| Standard COBRA | 102% of full premium |
| Disability extension (months 19-29) | 150% of full premium |
Cal-COBRA Premiums
| Situation | Maximum Premium |
|---|---|
| All Cal-COBRA coverage | 110% of full premium |
| COBRA extended by Cal-COBRA | 110% of full premium |
What Premiums Include
The premium percentage includes:
- Employer's share
- Employee's share
- Administrative fee
Termination of Continuation Coverage
When Coverage Ends
| Event | Effect |
|---|---|
| Premium not paid timely | Coverage terminates |
| Maximum period expires | Coverage terminates |
| Employer terminates all group coverage | Coverage terminates |
| Covered person obtains other group coverage | May terminate |
| Covered person becomes Medicare eligible | May terminate |
Grace Period
| Payment | Grace Period |
|---|---|
| Initial premium | 45 days from election |
| Ongoing premiums | 30 days from due date |
Special California Provisions
No Pre-Existing Condition Exclusions
Cal-COBRA prohibits:
- Pre-existing condition exclusions
- Waiting periods for pre-existing conditions
- Denial based on health status
Domestic Partner Coverage
California requires:
- Domestic partners have same continuation rights as spouses
- 36-month coverage for divorce/dissolution
- Same premium limits
Mental Health Parity
Continuation coverage must include:
- Mental health benefits at parity
- Substance abuse benefits
- Same limits as active employees
Exam Tip: California's Cal-COBRA applies to employers with 2-19 employees who are not covered by federal COBRA. Know the premium difference: 110% for Cal-COBRA vs. 102% for federal COBRA.
What is the employer size threshold for Cal-COBRA coverage?
What is the maximum premium for Cal-COBRA continuation coverage?
Can Cal-COBRA extend federal COBRA coverage?
How long does an employee have to elect COBRA or Cal-COBRA continuation coverage?
Can Cal-COBRA coverage be denied due to a pre-existing condition?