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The Difference Between Federal COBRA and California COBRA

Posted By on Oct 14, 2020 | 0 comments


Loss of an employer-provided health insurance plan can be concerning, but programs do exist to help you stay insured. A federal law called the Consolidated Omnibus Budget Reconciliation Act, or COBRA, created the opportunity for those who would otherwise lose an employer-provided plan to stay on the plan for a certain length of time. Likewise, the state of California instituted its own, separate but similar, COBRA law. Here’s what you need to know about both programs.

Both COBRA programs help individuals and/or families maintain health insurance coverage during a time that they would otherwise lose access to their employer-provided plan. Examples of these situations include layoffs, divorce, reduction in work hours, medical leave, death, and more.

If one of these “qualifying events” occurs, the employee or his/her dependents can apply for COBRA coverage to remain on their plan. They must opt in within 60 days, and send the first premium payment within another 45 days.

Federal COBRA allows you to remain on the health insurance plan for 18 months, or 36 months for dependents. This law only applies to those who were employed by a company with more than 20 employees. Each worker’s dependents are also eligible for COBRA if a qualifying event occurs.

Cal-COBRA, on the other hand, extends the provisions offered under the federal law. Cal-COBRA allows coverage for workers (or their dependents) employed by companies with 2 to 19 employees. Plus, the coverage can be maintained by the former employee for 36 months.

Those who are coming to the end of their 18-month federal coverage period can then apply for Cal-COBRA in order to retain healthcare coverage for another 18 months. The employer must be located in California, and employ 2-19 people for at least half of the year.

COBRA coverage is not always right for every person in every situation. If you face job loss or another qualifying event, contact us to discuss COBRA as well as your other options. We can help you decide if federal and/or California COBRA coverage is right for you, and what to do next.