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California COBRA Insurance
Losing your job is a difficult experience for any person and this experience is normally made even more difficult by facing tough decisions about health insurance since losing a job means not only losing income, but also losing health care coverage. Luckily there are many options for people in this situation to find a continued source of medical insurance including federal COBRA insurance, Cal-COBRA insurance, private health care, and government health care.
In the state of California, there are two options for COBRA coverage so that you can maintain the exact same coverage you had when you were employed. They are federal COBRA and Cal-COBRA. Cal-COBRA is basically an extension of the federal plan for California residents who do not qualify for federal coverage.
What is Cal-COBRA Insurance?
Cal-COBRA is a mini COBRA health insurance plan that was set up by the California government to ensure that people who do not qualify for federal coverage because they work at a small company can still get COBRA medical insurance options. The main difference between the federal plan and the state plan is that the state plan extends coverage to people who work at smaller companies with between 2-19 employees and therefore wouldn't be able to sign up for COBRA with the federal government. The other main difference is that it is more expensive and costs 110% of the entire premium.
With Cal-COBRA you are able to keep the exact same health insurance plan you had while you were employed. For the user, this means that nothing changes about how your plan works. You keep the same doctors and have all the same costs and coverage. It is simply an extension of your plan for 18-36 months.
Who Qualifies for Cal-COBRA?
The main qualifying components of Cal-COBRA are the exact same as federal COBRA except for the qualifying plan requirement. In the federal plan you need to work at a company with at last 20 employees on the plan and with Cal COBRA you qualify if there are at least 2 employees on the health insurance plan. Here is a summary of the main requirements for Cal-COBRA:
- You DO NOT qualify for federal COBRA
- Job loss did not come as a result of gross misconduct (i.e. violence, theft) and you either quit, retired, or were laid off from your job
- Your company has a health insurance plan that covers between 2-19 employees and you were part of the plan
- Family members are eligible for Cal-COBRA
- Divorced spouses and dependents who are losing their dependent status are eligible for Cal-COBRA
What is the Cost of California COBRA Insurance?
California COBRA, or Cal COBRA, comes with a very expensive price tag. If you choose to sign up for this insurance you will have to pay the entire monthly premium, both what you paid and what your employer paid for the plan, plus a 10% administration fee. That adds up to a lot of money. For example, let's imagine you paid $100 monthly for your health insurance for one individual. As part of yours benefits package, your employer covered 75% of health care costs, which in this case was an additional $300, bringing your total premium to $400. You must pay that premium monthly for Cal-COBRA plus an additional 10% admin fee, or $40, bringing your total payment to $440 monthly. Sound expensive? It is. Luckily there are other options that you can learn about below.
What is the Coverage Length for California COBRA?
Cal-COBRA lasts between 18-36 months, just like normal COBRA coverage depending on your situation. For most employees and their families Cal COBRA can be maintained for 18 months. In some circumstances like death of the covered employee, divorce from the covered employee, or loss of dependent status, Cal COBRA can be maintained for up to 36 months as long as the premium is paid in full monthly.
Other Health Insurance Options in California
With the huge expense of Cal-COBRA and federal COBRA, luckily there are other insurance options out there. The most popular is using a private health insurance plan. Most healthy people find they can save around 65% when they go with a private company for health insurance. This is due to the fact that the plan is built just for you and doesn't cover a large group of people at a place of employment with multiple medical needs. You only pay for your health needs, and when you are healthy, insurance companies see this as a much smaller expense. This is then passed to you in less expensive premiums. The second option is exploring government programs for children and families that may offer discounted programs if you are below a certain income amount.
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California Frequently Asked Questions
Can I sign up for Cal COBRA after my federal COBRA insurance runs out?
Yes. In California, you have the option to enroll in Cal COBRA after you have exhausted your federal benefits for an additional 18 months. You must contact your health insurance company if you wish to extend your coverage so that they can send you a Cal COBRA election notice.
How long does Cal COBRA insurance last for if I qualify?
Cal COBRA coverage actually lasts longer than the federal plan and is able to be utilized for up to 36 months. However, make sure to understand the cost of keeping Cal COBRA for a full 3 years because the premiums tend to be very expensive.
How do I sign up for Cal COBRA?
When you lose or leave your job, your employer should provide you with a notice that lets you know you are eligible for California COBRA coverage and an election notice to sign up. You must complete and mail in that form within 60 days indicating each person enrolling in Cal COBRA. Additionally, if you qualify for COBRA due to divorce, death, Medicare qualification of a spouse/parent, or loss of dependent status you must notify the health plan administrator and then will have 60 days from the date on the notice you receive to enroll in Cal COBRA.
My former employer is changing the health insurance plan, what happens to my California COBRA? Will I lose it?
Your insurance coverage will change to whatever the employer is now using. Cal COBRA is simply an extension of the health insurance coverage you had, so any changes your employer makes to the plan, including an entirely new plan, will be the same changes under Cal COBRA. You should receive notification of the change and then like any employee, you will have the option to enroll in the new plan or not.
I just got a new job but am not happy with their insurance; can I keep Cal COBRA instead of switching?
Unfortunately once you are eligible for a new health insurance plan, you lose eligibility for Cal COBRA. However if there is a waiting period to enroll in the new plan, you can maintain your Cal COBRA coverage through that waiting period.