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Pacificare Blue Shield
Pacific Advantage Sharp Health Plan

CAL-COBRA - California Continuation Benefits Replacement Act

Cal-COBRA has recently been ammended by Assembly Bill No. 1401

Cal-COBRA extends COBRA-like benefits (i.e. continuation of coverage)  to employees and dependent spouses and children of firms of less than 20 employees.

What are the differences between COBRA and CAL-COBRA?
COBRA Cal-COBRA
Federal Program State Program

Applies to Non-Government Employers With 20 or More Employees who lose health care coverage under a group health plan

Applies to Non-Government employers of 2-19 Employees who lose health care coverage under a group health plan

Must be enrolled in an employer's health plan at the time of a qualifying event

Must be enrolled in an employer's health plan at the time of a qualifying event

Qualified Beneficiaries include spouse and dependent children

Qualified Beneficiaries include spouse and dependent children

Employer must notify employees that benefits are available within 30 days of a qualifying event

Employer must notify employees benefits are available within 30 days of a qualifying event

Employee or Qualified Beneficiary must notify the health plan within 60 days of a Qualifying Event

Employee or Qualified Beneficiary must notify the health plan or the employer within 60 days of a Qualifying Event

Cost: No >102% of regular premium for 18 months; No > 150% for subsequent months

Cost No > 110% of regular premium for 36 months; No > 150% for subsequent months

Lasts 18 to 36 months, Depending on Qualifying Event

Lasts 18 to 36 months, Depending on Qualifying Event

Current COBRA provisions are found in three places: the Public Health Services Act, 42 U.S.C. §§ 300bb-1 et seq., (group health for public mployees) and in the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1161 et seq. (group health for private employees), and the Internal Revenue Code at 26 U.S.C. §§ 4980B

Cal-COBRA provisions are found at Cal. Health & Safety Code § 1366.20 et seq.
 

The major difference between Cal-COBRA and COBRA is that the insurance carrier is responsible for the administration of Cal-COBRA.  The employer is responsible for notifying the carrier of the qualifying event and the carrier takes it from there.

Which employees and dependents are eligible?
Employees and their dependent spouses and children of these firms who are enrolled in the employer’s employee benefit plans at the time of a qualifying event (defined below) are known as “qualified beneficiaries” and are eligible for Cal-COBRA, unless the individual:

  • becomes covered under another group benefit plan which does not impose any pre-existing condition limitations affecting the individual;
  • becomes eligible for federal COBRA;
  • becomes eligible for Medicare;
  • becomes eligible for Medi-Cal;
  • fails to notify the health plan of a qualifying event in the time specified by the law (generally within 60 days); or
  • fails to pay their premium on a timely basis

 

What are “qualifying events”?

  • The death of the covered employee;
  • The termination or reduction of hours of the covered employee’s employment for other than gross misconduct;
  • Their divorce or legal separation from a covered employee;
  • Their loss of dependent status by a dependent child; and
  • The covered employee becoming eligible for Medicare.

 

How long does Cal-COBRA coverage last?
That depends in large part on the qualifying event:

  • If the qualifying event is due to termination of employment or a reduction in hours, the qualified beneficiary can maintain Cal-COBRA coverage for up to 36 months (assuming the qualified beneficiary remains eligible by, for example, paying premiums on time). If, within 60 days of qualifying for Cal-COBRA due to termination or a reduction in hours, the qualified beneficiary becomes disabled and is subsequently determined by the Social Security Administration to be totally disabled, Cal-COBRA may be extended for up to another 11 months (for a total of 29 months).
  • If the qualifying event is for a reason other than for termination of employment or a reduction in hours, the coverage can last for up to 36 months.
  • After January 1, 1999, employees who are 60 years or older when they become eligible for Cal-COBRA and have worked for the employer for at least five years may continue their coverage even after Cal-COBRA until they turn 65.

 

Which benefit plans are covered by Cal-COBRA?
Health, dental and vision plans are covered.  However, if a carrier offers a package of these benefits, it cannot be required to offer only the dental and/or vision components under Cal-COBRA.

How much do employers pay for Cal-COBRA coverage?
Under most circumstances, 110 percent of the cost of their group coverage. However, qualified beneficiaries who are totally disabled as determined by the Social Security Administration can continue their coverage up to an additional 11 months beyond the initial 18 months by paying 150 percent of the premium for the additional 11 months.  

 

How do I notify my carrier of a qualifying event?
Each carrier handles Cal-COBRA notification differently.   Most require you to mail or fax a form to their Cal-COBRA department.  Your administration guide should have the proper forms and information.
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