COBRA, an acronym for the federal Comprehensive Omnibus Budget Reconciliation Act, has become shorthand of sorts for an employee’s right to continue her employer-provided group health insurance coverage when she leaves her job. Cal-COBRA is California’s version of the federal legislation, and it extends coverage to some California residents who are not otherwise covered by the federal law.
Federal COBRA
COBRA does not apply to all employers. COBRA requires employers that have 20 or more employees and sponsor group health insurance plans to provide an opportunity for employees to continue coverage even if the employees’ coverage is ending due to reduction in hours, termination of employment, death, divorce and the like.
You can obtain COBRA coverage for yourself and any qualified beneficiaries, such as a spouse or child, whom you were covering on the day before your eligibility for coverage changed. For example, if you covered yourself and your spouse the day before you lost your job, both you and your spouse may continue your group health insurance benefits under COBRA. If you covered your dependent child under your plan and the child is no longer a “dependent” under the plan, your child can continue his coverage under the plan. Moreover, while you are under COBRA coverage, you may add any child you have or adopt as a beneficiary under your plan.
If you become eligible for continuation coverage, you must file a claim for benefits according to the rules established by your group health plan. You will have up to 60 days to make your COBRA election 45 days after you make the election to pay your initial premium payment, retroactive to the beginning of the coverage period.
Generally speaking, you must pay for your own continuing coverage. Under federal law, the premium cannot be more than 102 percent of the employer’s cost.
Your federal COBRA coverage continues for a maximum of 18 months. If a second qualifying life event occurs during the 18 months of coverage, you may quality for an additional 18 months of coverage. If you become disabled during the first 60 days of coverage, you may be eligible to extend your coverage for an additional 11 months because of your disability. In that case, your premium payment can increase to 150 percent of the employer’s cost during the 11-month extension.
Cal-COBRA
Cal-COBRA provides coverage similar to federal benefits to Californians who had group coverage through a small business. The state program applies to non-government employers that employ 2 to 19 employees and provide group health insurance. Notification requirements and enrollment deadlines for Cal-COBRA are the same as for the federal program: an employer must notify an employee that benefits are available no later than 30 days after a qualifying event occurs, and the employee or beneficiary must opt in to coverage within 60 days.
The cost of participating in Cal-COBRA may be slightly higher than federal costs. Instead of paying 102 percent of the employer’s premium, Cal-COBRA beneficiaries may be required to pay up to 110 percent of the premium cost for 18 months and up to 150 percent of the premium cost if coverage extends beyond 18 months. Your health insurance coverage under Cal-COBRA can last up to 36 months