What Is the Difference Between Cal & Cobra?

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 and the California-COBRA (Cal-COBRA) were originally enacted to give employees the ability to maintain health insurance coverage if they would otherwise lose coverage due to certain qualifying events. The Cal-COBRA is similar in scope to the federal COBRA while also attempting to offer coverage to those employees not covered by the federal law.

Federal COBRA

• The federal COBRA was designed to give employees and their families the right to continue group health coverage if they lose it under certain circumstances. In most cases, COBRA allows for up to 18 months of coverage after a qualifying event. Qualified employees are required to pay the entire premium for coverage, including what the employer previously paid. Coverage is lost if premium payments are not made in a timely fashion. COBRA is not in force for individual health insurance plans. COBRA expired on May 31, 2010, and is no longer in effect (see Reference section).

Eligibility Requirements for COBRA

• The U.S. Department of Labor lists three requirements to qualify for COBRA benefits. These requirements are: having a qualified group health plan, being a qualified beneficiary and experiencing a qualifying event. A group health plan is subject to COBRA if the employer had 20 or more employees for at least half the business days of the previous year. A qualified beneficiary is someone who was covered by the qualifying group health plan on the day before the qualifying event, including an employee, his spouse and their dependent children. A qualifying event is one that causes a beneficiary to lose coverage, such as termination of employment, reduction in the number of work hours or the death of the covered employee.

Cal-COBRA

• Cal-COBRA is a California initiative closely mirroring the federal COBRA law. Its main purpose is to extend the benefits offered in the federal program to include employees otherwise excluded from benefits. Cal-COBRA, like federal COBRA, is not in force for individual health insurance plans.

Differences Between Cal-COBRA and Federal COBRA

• Despite the laws being generally similar in nature, there are differences in Cal-COBRA that extend coverage to some who are not covered under the federal law. For Cal-COBRA, the group health plan is subject to the law if the employer has between two and 19 employees for more than half of the previous year's working days. Church plans are eligible under Cal-COBRA, unlike federal COBRA. Finally, Cal-COBRA extends COBRA eligibility to 36 months after a qualifying event, as opposed to the 18 months required by federal law.