COBRA health insurance in California

COBRA is continuation of a prior California group health insurance through your previous employer. COBRA coverage typically lasts 18 months (can be up to 36 months).  You are able to elect COBRA within a 62 day window from your last date of group medical insurance and continue monthly just the same way you had it with your employer.  Most people do not realize that they have alternatives to COBRA that can significantly reduce their cost as COBRA is typically very expensive in comparison.  Below are some general points on COBRA coverage followed by some alternatives to reduce cost.

• COBRA rates can be 10% higher than what the company and you combined were paying for your group plan through work.
• COBRA is paid monthly and can be cancelled anytime.
• If you wait till the end of your 62 day window, you will still need to back-pay first two months of COBRA to bring it current.
• Dependent costs are typically much higher on a COBRA (Group) plan compared to the employee cost.  COBRA can be split up.  For example, you can get your own California individual plan and keep someone who is unable to qualify (based on pre-existing conditions) on COBRA.  Verify with your COBRA administrator/insurance company before you do this..
• If you are unable to qualify for Individual/Family coverage and you exhaust COBRA, then there is typically a HIPAA option available to you.  By law, each carrier must offer their two most popular Individual plans on a Guaranteed Issue basis to HIPAA eligible individuals.  The rates are higher than qualifying based on health but it does provide a back-up option in case you are unable to get your own Individual coverage.  There is also a 62 day window from the last date of COBRA coverage to initiate HIPAA.
  

What Is COBRA and 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. 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.

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.

Guide provided by http://www.dmhc.ca.gov/

Federal COBRA and Cal-COBRA

Federal COBRA is a U.S. law that applies to employers and group health plans that cover 20 or more employees. It lets you keep your group health insurance when your job ends or your hours are cut. You have to pay the premium but you can keep your insurance for at least 18 months.

Cal-COBRA is a California law that is like Federal COBRA. Cal-COBRA applies to employers and group health plans that cover from 2 to 19 employees. It lets you keep your insurance for up to 36 months.

Cal-COBRA is also for people who use up their Federal COBRA. When your 18 months of Federal COBRA ends, you can buy 18 more months of health insurance under Cal-COBRA.

Small Employer (2 to 19 employees)	Large Employer (20 or more employees)
Cal-COBRA—up to 36 months	Federal COBRA—up to 18 months Cal-COBRA—up to 18 months more after you use up Federal COBRA

Meet the Deadlines

• You have 60 days after being notified of your Federal COBRA or Cal-COBRA rights to sign up.
• If you do not get notification in the mail, call your last employer or health plan.
• Call the HMO Help Center if you are having problems getting the forms you need.
• If you miss the deadline, you lose the chance to sign up for Federal COBRA/Cal-COBRA.

Resources

California Department of Insurance (CDI)
State agency with information on COBRA
1-800-927-4357 (many languages)
1-800-482-4833 (TTY)
www.insurance.ca.gov

U.S. Department of Labor COBRA
Information on the Federal COBRA program to help you keep group health insurance if you lose your job or your hours are cut
1-866-444-3272 (Spanish, Chinese)
1-877-889-5627 (TTY)
www.dol.gov/dol/topic/health-plans/cobra.htm