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The Consolidated Omnibus Budget Reconciliation Act (COBRA) is federal law that extends your current group health insurance when you experience a qualifying event such as termination of employment or reduction of hours to part-time status. The extension period is 18 months and some people with special qualifying events may be eligible for a longer extension. To be eligible for COBRA, your group policy must be in force with 20 or more employees covered on more than 50 percent of its typical business days in the previous calendar year.

Indemnity policies, PPOs, HMOs, and self-insured plans are all eligible for COBRA extension; however, federal government employee plans and church plans are exempt from COBRA. Individual health insurance is also exempt from COBRA extension, which may be another reason to pursue participation in group health plans, if possible.

Cal-COBRA is a California law that has similar provisions to federal COBRA. With Cal-COBRA the group policy must be in force with 2-19 employees covered on at least 50 percent of its working days during

• the preceding calendar year, or, 
• the preceding calendar quarter, if the employer was not in business during any part of the preceding calendar year.

Eligibility for Cal-COBRA extends to indemnity policies, PPOs, and HMOs only. Self-insured plans are not eligible. Unlike COBRA, church plans are eligible under Cal-COBRA. It is important to note that both COBRA and Cal-COBRA do not apply to individual health insurance.

As of January 1, 2003, the extension period for Cal-COBRA has been changed from 18 months to 36 months. If you become eligible for Cal-COBRA after January 1, 2003, you will have the benefit of Cal-COBRA coverage for a full 36 months instead of the prior 18-month coverage extension. California Insurance Code (CIC) Section 10128.59 provides a similar extension under Cal-COBRA for those who have exhausted their 18 months on federal COBRA (or longer in special circumstances) for a total extension that cannot exceed 36 months. For the special Cal-COBRA extension to apply, you must have become eligible for COBRA after January 1, 2003, and the employer's master policy must be issued in California. If the group master policy is not issued in California, then the employer must employ 51% or more of its employees in California and have its principal place of business in California for their California employees to take advantage of Cal-COBRA.

COBRA is regulated by the DOL-EBSA, and Cal-COBRA is jointly regulated by the CDI and the DMHC depending upon what type of group coverage you have (indemnity or HMO). These agencies can provide further information on the time frames employers and insurance companies/health plans must follow to offer COBRA or Cal-COBRA extension coverage for eligible employees and their dependents. Also, information can be furnished on the actions and responsibilities required by employees to participate and elect continuation of benefits under COBRA or Cal-COBRA. When experiencing questions or problems with COBRA or Cal-COBRA, you can reach the appropriate state or federal agency by referencing the contact information available in the resources section below.

Important Points to Remember About COBRA and Cal-COBRA:

• COBRA is federal law that extends your current group health coverage after a qualifying event. Individual policies do not qualify for COBRA. 
• COBRA law applies to group policies in force with 20 or more employees covered on more than 50 percent of its typical business days in the previous calendar year. 
• Indemnity policies, HMOs, PPOs, and self-insured plans are COBRA eligible. Federal government employee plans and church plans are COBRA exempt. 
• Cal-COBRA is California law that closely follows federal COBRA. 
• Cal-COBRA law applies to group policies in force with 2-19 employees covered. Like COBRA, individual policies do not qualify for Cal-COBRA. 
• Only indemnity policies, PPOs, HMOs, and church plans are Cal-COBRA eligible. 
• You can contact the DOL-EBSA for questions regarding COBRA law. 
• You can contact either the CDI (on indemnity policies) or the DMHC (on HMO/managed care plans) for questions regarding Cal-COBRA law.

COBRA; Continuing Your Coverage

If your health insurance coverage depends on your employment, as is the case with many people, you may be able to continue your coverage even after you leave your job.  The end of employment no longer means the end of health insurance.  The Consolidated Omnibus Budget Reconciliation Act of 1986, commonly known as COBRA, extends group health insurance coverage for people willing to pay for converage.

The Rules:

• All employer funded health plans covering at least 20 employees - insured and self-insured, public sector and private sector - must offer employees and dependents the optionof continuing group health insurance coverage when eligibility expires.  The covered employees may have to pay the premium, however
•  Employees who are fired or leave their jobs for any reason (except gross misconduct) are entitled to coninuing coverage for a period of up to 18 months.  Their dependents are entitled to continue coverage for the same period of time.
•  Divorced or separated spouses of active employees, and their dependents, may be covered for a period of up to 36 months.  Widowed spouses and dependents of covered workers must similarly be offered coverage for a period of up to 36 months.
•  Reitrees with employer-paid health insruance are considered covered employees; their spouses are entitled to continue coverage after a divorce or the retiree's death
•  Coverage must provide the same health plan benefits that are offered to active workers.  Coverage need not,however, include life or disability insurance.
•  Coverage ends at the expiration of the designated period or when the individual secures health insurance through another employer (including a spouse's employer) or becomes entitled to Medicare benefits after the date of the COBRA election.  It may also end if the employers discontinues group health insurance coverage for all employees or if the overed individual fails to pay premiums on time.
•  Employers may charge up to 102 percent of actual premium costs, with the extra 2 percent serving to defray administrative expenses or 150 percent of actual premium costs during a disability extension.

 Other Choices

• You may find the continuation coverage too expensive.  If so, you do have other choices.  One alternative would be to convert your group policy to an individual policy.  You can usually do so without a medical exam and you will not have any gaps in coverage.  On the down side, however, you'll find that such policies are usually far less comprehensive than the group coverage you're giving up.
•  Another alternative would be to take out an individual health insurance policy.  Such policies may be expensive, but you should talk with your insurance agent about finding the right policy at the right price.

For more information, you can download a copy of Cobra for Employee from The Employee Benefits Security Administration at http://www.dol.gov/ebsa/pdf/cobraemployee.pdf

American Recovery and Reinvestment Act of 2009 (ARRA 2009)

The American Recovery and Reinvestment Act of 2009 (ARRA), as amended on December 19, 2009 by the Department of Defense Appropriations Act, 2010 (2010 DOD Act) provides for premium reductions for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA. Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. To qualify, individuals must experience a COBRA qualifying event that is the involuntary termination of a covered employee's employment. The involuntary termination must occur during the period that began September 1, 2008 and ends on February 28, 2010. The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.

For Update information, please go to:  http://www.dol.gov/ebsa/COBRA.html