COBRA and Cal-COBRA

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FEDERAL COBRA

COBRA stands for Consolidated Omnibus Budget Reconciliation Act of Act 1985, and this act requires employers with group health plans to offer their employees the opportunity to continue health coverage after they leave their job.  In California, companies that have 20 or more employees fall under the COBRA rules.  Under COBRA laws, if you voluntarily resign from your job or are terminated (for any reason other than gross misconduct), you are eligible for continuing your health coverage.  It is very important to remember though that you only have 60 days to make your COBRA election before the opportunity goes away. 

COBRA Eligibility and Coverage Periods

Below are the COBRA coverage periods and qualifying events. 

• Termination from a job - Employee, spouse & dependent child(ren) - 18 months
• Reduction of hours - Employee, spouse & dependent child(ren) - 18 months
• Disability extension - Employee, spouse & dependent child(ren) - 29 months
• Employee who qualifies for Medicare - Employee & dependent child(ren) - 36 months
• Divorce or legal separation - Spouse & dependent child(ren) - 36 months
• Death of an employee - Spouse & dependent child(ren) - 36 months
• Loss of dependent child status - Dependent child(ren) - 36 months

Cal-COBRA

Cal-COBRA is a California law that is very similar to Federal COBRA.  However, Cal-COBRA applies to companies that offer group health plans that cover 2 to 19 employees.  You can keep your group health insurance for up to 36 months.  In addition, for those that are on Federal COBRA and used up their 18 months, Cal-COBRA offers the opportunity to extend the health insurance coverage another 18 months. 

Is COBRA The Right Choice For Me?

COBRA can offer the necessary protection for many families.  For instance, if you have a pre-existing condition, it may be a better choice for you and your family to stay on COBRA so you do not have a break in coverage.  Additionally, private insurance is not guaranteed to get approved for everyone, so COBRA does provide that protection that some families need.  Consider keeping COBRA if you have medical conditions that might prevent you from getting approved for private individual and family insurance.  Also, if you are currently pregnant, then staying on COBRA is the best option.

Consider applying for individual health insurance if you are a healthier person.  Also, if COBRA coverage is too expensive, then their may be a good chance that a cheaper individual or family health insurance plan might work for you.  And sometimes, you can go a different. route.  When comparing health insurance plans, you might find that it is better to mix and match.  For instance, if you have a medical condition and want to stay on COBRA, you can still get coverage for your spouse and/or children separately.