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COBRA: Federal vs. California

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the number of hours worked, transition between jobs, death, divorce, and other life events.

Federal COBRA requires that group health plans sponsored by employers with 20 or more employees in the prior year must offer employees and their families the opportunity for a temporary extension of their health coverage, called “Continuation of Coverage”, in certain instances where coverage under the plan would otherwise end. The full monthly premium must be paid by the participant with an additional 2% administration fee. COBRA law outlines how to elect this coverage. Employers are required by this law to provide both an Election Notice with instructions and the full monthly premium rate with admin fee.

Some states also have laws pertaining to COBRA and should be reviewed in addition to Federal COBRA.

 

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