California Health Insurance Continuation (COBRA): What you need to know

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers with 20 or more employees and gives employees and their dependents the right to continue their group health coverage if they lose group health insurance coverage for any of certain specified reasons. The California Continuation Benefits Replacement Act (Cal-COBRA) requires continuation coverage be provided by insurers of plans sponsored by employers with 2 to 19 employees not covered by federal COBRA. Cal-COBRA generally mirrors federal continuation requirements.
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Extended continuation. Cal-COBRA also requires a total of 36 months' continuation for individuals entitled to continuation coverage under either Cal-COBRA or federal COBRA.
Important: State law requirements apply only to insured health plans. Self-insured plans are not covered by any state law continuation requirements. In addition, provisions of the law that are not the regulation of health insurance companies and health maintenance organizations may be preempted by ERISA. Most provisions of Cal-COBRA, however, regulate insurance companies and are likely exempt from preemption, The provisions that are probably subject to preemption are the notice requirements on employers. There will likely be legal challenges made claiming that all or parts of Cal-COBRA are preempted. Pending resolution of this issue, employers should inform employees that Cal-COBRA coverage exists and refer them to their insurer or HMO for details.
Covered employers. Cal-COBRA applies to small employers with 2 to 19 employees who are thus not covered by federal COBRA because of the exception for employers with fewer than 20 employees. Cal-COBRA applies to ...

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