COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is a federal law that provides employees, and their family member(s) continuous insurance coverage benefits after the termination of their group insurance plan. Employees are fully responsible for the insurance premium.
- After the employee resigned or qualified with some other COBRA event, within 30 days, the employer shall send a COBRA notice; otherwise, the employee could file a lawsuit against the employer at any time.
- The resigned employee can decide whether to join COBRA or forfeit within 60 days of his/her termination date. After 60 days, it will automatically be considered forfeit the right.
CAL-COBRA (California Continuation Benefits Replacement Act of 1997) is an extension from Fed-COBRA and only applies to companies in California. Like COBRA, resigned employees will receive notice within 30 days and need to decide whether to join within 60 days from the termination date or be considered forfeiting the right.
※ Please note: Cal-COBRA and COBRA's biggest difference is that CAL-COBRA's notices are issued by insurance carriers to its members. COBRA, on the other hand, is issued by the employer or third-party administrator.
- Continuation Coverage Period：
A company's COBRA and CAL-COBRA's maximum continuation coverage period varies depending on its total number of full-time employees.
|Type/Number of Full Time Employees
|COBRA||20 and more employees||18 or 36 months
|CAL-COBRA||2-19 employees||Up to 36 months
- Eligible Insurance Products：
Not all insurance plans are available under COBRA and CAL-COBRA. Only「Medically Necessary」type plans are eligible, and it includes the following:
- Medical Insurance - primarily uses for doctor visits, inpatient, surgery, prescription, and medical treatment
- Dental Insurance - primarily uses for dental care
- Vision Insurance- is primarily used for routine eye exams and prescription glasses
Life insurance and short-term/long-term disability insurance do not fall under「medically necessary」; therefore, after an employee resigns, he/she cannot continue his/her term life insurance and disability through COBRA or CAL-COBRA.