Life happens. If you’ve lost an employer-provided health insurance plan—whether it was yours, a spouse’s, or even a parent’s—options such as Cal-COBRA can help you stay covered.
What is Cal-COBRA?
Cal-COBRA, California’s version of federal COBRA (Consolidated Omnibus Budget Reconciliation Act), is a set of laws designed to help you temporarily keep your employer-provided health insurance when life happens—whether it’s the loss of a job, divorce, or the death of a spouse under whose plan you were covered—and give you time to find a permanent health insurance solution.
Like federal COBRA, Cal-COBRA not only protects individuals who were covered by an employer-provided plan, but also any dependents who were covered by that plan, such as a spouse or a child.
The Differences & the Relationship Between COBRA & Cal-COBRA
The Differences
Both Cal-COBRA and federal COBRA accomplish the same purpose, with two notable differences:
- Cal-COBRA applies to employers with 2-19 employees, whereas federal COBRA applies to employers with more than 20 employees.
- Cal-COBRA offers coverage for up to 36 months, while federal COBRA offers coverage for 18 months for the former employee and up to 36 months for any dependents.
The Relationship
The relationship between federal COBRA and Cal-COBRA is essentially that Cal-COBRA extends COBRA an extra 18 months for qualifying California residents. That is, federal COBRA gives individuals up to 18 months of coverage after a qualifying event has taken place. Those who have reached the end of 18 months can then apply for Cal-COBRA and continue receiving coverage for an additional 18 months.
Who qualifies for Cal-COBRA?
In order to qualify for coverage under Cal-COBRA, both the employer and the former employee need to meet certain requirements.
Employer Requirements
- Employer must be located in California
- Employer must employ from 2 to 19 people for at least 50% of the year.
Note that Cal-COBRA may also apply to employers with 20 or more employees when an employee has exhausted his or her 18 months of federal COBRA benefits.
Individual & Employee Requirements
For an employee, a “qualifying event” needs to have taken place, such as:
- the loss of a job, whether voluntary or involuntary
- a reduction in the employee’s hours as a result of strike or a slowdown in business
- medical leave or even death of the covered employee
- divorce or legal separation that terminates the ex-spouse’s eligibility for benefits
- a dependent child turning 26
When to Apply for Cal-COBRA and How Long it Lasts
The window to apply for Cal-COBRA is limited and time sensitive, so be sure to pay attention to deadlines. You have 60 days to opt in for coverage, and then 45 days to send in your first premium payment. Coverage is available for 36 months for both you and any of your dependents.
If you’re unsure about COBRA deadlines, qualifications, or alternatives, contact us today. Our services are always free and we’re delighted to help.
How much does Cal-COBRA cost?
Like its federal counterpart, Cal-COBRA can be expensive. Instead of paying the group rate that was paid under the employer, you pay the full premium plus an administration fee of up to 10%.
However, in rare instances, such as in cases where you have ongoing medical conditions that require costly care, cheaper alternatives to Cal-COBRA might not be ideal because they may not provide the coverage you had under the employer’s plan.
While cost alone makes Cal-COBRA unrealistic for most people, each individual will need to consider their own unique needs, budget, and circumstances—and we can help you do that.
In order to qualify for coverage under Cal-COBRA, both the employer and the former employee need to meet certain requirements.
Is there a better alternative to Cal-COBRA?
For most people, yes, there is. Because you may only need Cal-COBRA only until you receive insurance from a new employer, you may not need to activate the coverage unless you have medical expenses. Also, if you meet certain income requirements—which most people do—you may qualify for a subsidy under Covered California which would help pay for the cost of an individual health insurance plan, giving you adequate coverage at an affordable rate.
There are many factors to consider, but we can walk you through all your options and help you find the one that’s right for you. For over 40 years, we’ve helped thousands of people just like you find the best health insurance coverage for their needs—whether that’s Cal-COBRA or something else. Contact us today and let us help you figure it out.
