INSURANCE OPTIONS

COBRA applies to employers with twenty or more employees and relates to their medical insurance coverage. COBRA regulations require these employers to offer continuation benefits to employees who lose their group insurance coverage due to termination of their employment or a reduction of their hours, and to family members who lose coverage due to death, divorce, dropping out of school, or by reaching the maximum age.

COBRA allows terminated employees and family members to continue on their group insurance plan. Participants may continue their benefits for up to eighteen months following the qualifying event (up to 29 months if they are disabled and collecting Social Security). Family members have up to thirty-six months of continuation coverage if eligibility is due to death or divorce of the employee, or overage dependent.

Generally, the plan administrator notifies the insurance carrier that someone is now covered through COBRA. Otherwise, all coverage stays the same.

Once you qualify for COBRA, employers must notify you within fourteen days and tell you the cost of your coverage. You have sixty days to decide whether you want the coverage, and then forty-five days to send in your first premium. You must then pay for three months' coverage in one payment. After that, your premium is due monthly by the last day of the month. You are required to pay the premium yourself and may be charged an additional two percent for the cost of administration.

Because your former employer is not required to notify you if they have received your premium, it is recommended that you pay in person or by certified mail.

It is possible to take only part of the coverage (such as just medical), and also to split out family members (such as insuring only dependents). It is not necessary to keep your coverage as it was, except that it is not possible to add coverage that you didn't have before, or to add an uninsured family member. Life insurance is not addressed by COBRA, but there may be special conversion privileges through your plan.

COBRA can be difficult to administer, and many personnel departments will try to simplify the process. They may tell you that you cannot split your coverage, that your money has to be in by the first of the month, or that you need to notify them of your desire to participate within thirty days of termination. REMEMBER, these may be policies designed to make their job easier -- it is not the law! You may need to inform them of the law so that you can arrange your coverage to best meet your needs.

2 to 19 Employees
Cal-COBRA applies to employers with two to nineteen employees and relates to their medical insurance coverage. These regulations require insurers of these employers to offer continuation benefits to employees who lose their group insurance coverage due to termination of their employment or a reduction of their hours, and to family members who lose coverage due to death, divorce, dropping out of school, or by reaching the maximum age.

Cal-COBRA allows terminated employees and family members to continue their group insurance plan. Participants may continue their benefits for up to thirty-six months following the qualifying event.

Generally, the plan administrator notifies the insurance carrier that there has been a qualifying event (such as termination of employment), and the insurance carrier notifies the employee of his continuation rights.

You have sixty days to decide whether you want the coverage, and then forty-five days to send in your first premium. If you wait this long to exercise coverage, you must then pay for three months' coverage in one payment. After that, your premium is due monthly. You are required to pay the premium yourself and may be charged an additional ten percent for the cost of administration. The insurance carrier will bill you, and you will remit payments directly to them.

Because many employees want to use Cal-COBRA only until they get insurance at a new job, they may not even need to activate the coverage unless they have medical expenses. As an alternative, there are temporary policies available for short gaps of coverage.

It may be possible to take only part of the coverage (such as just medical), and also to split out family members (such as insuring only dependents). It is not necessary to keep your coverage as it was, except that it is not possible to add coverage that you didn't have before, or to add an uninsured family member. Life insurance is not addressed by Cal-COBRA, but there may be special conversion privileges through your plan.

There are a few circumstances when your employer will not have to offer Cal-CORBA. This includes churches and employers headquartered outside of California.

20 Employees or more
The California legislature amended the law regarding continuation of group insurance (referred to as Cal-COBRA) in 2003.

The new law extends to all employees of California and allows for continuation of their group insurance for up to three years. Exceptions to this law includes groups who are self-insured and those with headquarters outside of California.

For those companies with twenty or more employees, the continuation of coverage will be for 36 months, including federal COBRA. During their first 18 months, the individuals will be responsible for paying the premium, including a 2% administration fee, to their former employer. For the second 18 months, they will be billed by the insurance company directly, and the administration fee can be increased to 10%.

There are a few circumstances when your employer will not have to offer Cal-CORBA. This includes employers who have self-insured programs, and employers outside of California.

INSURANCE OPTIONS