Benefits Administration Manual

Consolidated Omnibus Budget Reconciliation Act (COBRA)

412. Length of COBRA Coverage

COBRA provides two basic maximum periods of coverage for each type of qualifying event. The two maximum periods specified are 18 or 36 months. The following outlines the qualifying events and maximum length of continuation coverage.

COBRA Coverage 18 Months

If the qualifying event causing the loss of coverage is a voluntary or involuntary termination of employment (other than for reasons of gross misconduct) or a reduction of hours (which results in a loss of coverage), then each qualified beneficiary will have the opportunity to continue coverage for 18 months from the date of the loss of coverage.

Social Security Disability Extension to the 18-Month Period

The 18 months of continuation coverage can be extended for an additional 11 months of coverage, to a maximum of 29 months for all qualified beneficiaries if the Social Security Administration determines a qualified beneficiary was disabled according to Title II or XVI of the Social Security Act at the time of the qualifying event or any time during the first 60 days of continuation coverage. This extended period allows disabled persons continued coverage for the period of time that it normally takes to become eligible for Medicare. Premiums for this coverage beyond the initial 18 months will be calculated at 150% of the State's group coverage premium rate and will continue to be paid monthly directly to the plan or its designee.

It is the qualified beneficiary's responsibility to obtain this disability determination from the Social Security Administration and provide a copy of the determination to the appropriate plan within 60 days after the date of determination and before the original 18-month COBRA eligibility period expires. It is also the qualified beneficiaries responsibility to notify the plan within 30 days if a final determination has been made that they are no longer disabled.

Special Medicare Entitlement Rule for Dependents Only

If an employee becomes entitled to Medicare benefits prior to the date of an 18-month qualifying event, then his/her dependents is eligible for 18 months of COBRA continuation coverage, or 36 months measured from the date of the Medicare entitlement, whichever is greater.

Example: If an employee becomes entitled to Medicare seven (7) months prior to termination of employment, then the dependents will be offered 29 months of continuation coverage. The employee is only offered 18 months.

SB 761 - Former State Employee Extension to the 18-Month Period (Repealed Effective January 1, 2005)

Another extension to the 18-month continuation period is available to any former State of California employee currently enrolled in COBRA and he/she was 60 years of age and an active employee for at least five prior years on the date that his/her employment ended. The extended COBRA period will provide uninterrupted coverage until age 65 or entitlement to Medicare. The spouse or domestic partner may extend the coverage for a period of five years from the date that the former employee's employment ends. Premiums for extended coverage for former employees beyond the initial 18 months will be calculated at 213% of the State's group coverage premium rate and will continue to be paid monthly directly to the plan or its designee.

To elect, the former employee, spouse, or domestic partner must notify the plan within 30 days prior to the end of the 18-month COBRA coverage period.

AB 254 Repeals SB 761 - Former State Employee Extension to the 18-Month Period

Under California law employer-sponsored medical plans the provisions of SB 761 were repealed for those individuals who meet the eligibility requirements of SB 761 after January 1, 2005. What this means is that if an employee experiences a qualifying event (i.e., termination of employment) on or after January 1, 2005, then the provisions of SB 761 are not available at the end of the 18-month COBRA continuation coverage.

AB 1401 - Extension of the Minimum COBRA Coverage Period

Under this California law, employer-sponsored medical plans must allow an extension to COBRA coverage for an enrollee who has exhausted their initial 18 month continuation coverage period for up to 36 months from the date that coverage began. This provision will only apply to continuation of medical insurance COBRA coverage. In no event will continuation coverage last beyond three years (36 months) from the original date of loss of coverage. Premiums for extended coverage for former employees beyond the initial 18 months will be calculated at 110% of the State's group coverage premium rate and will continue to be paid monthly directly to the plan or its designee.

Secondary COBRA Event occurs during the 18-Month Period

If during the 18 months of continuation coverage, a second event takes place (divorce, termination of domestic partnership, legal separation, death, or a dependent child ceases to be a dependent), then the original 18 months of continuation coverage can be extended to 36 months from the original date of loss of coverage for eligible dependent qualified beneficiaries. If a second event occurs, it is the qualified beneficiary's responsibility to notify the plan in writing within 60 days of the second event and within the original 18-month COBRA timeline.

In no event will continuation coverage last beyond three years (36 months) from the original date of loss of coverage. A reduction in hours followed by a voluntary or involuntary termination of employment is not considered a second COBRA timeline.

COBRA Coverage 36 Months

If the original qualifying event causing the loss of coverage was the death of the employee, divorce, termination of domestic partnership, legal separation, or child ceases to be a dependent (e.g., child turns age 26, child marries), then each qualified beneficiary will have the opportunity to continue coverage for 36 months from the date of his/her loss of coverage.

COBRA Calendar

The COBRA calendar will provide the date that COBRA continuation coverage ends based on the effective date of the 18 or 36 month coverage period. Refer to Attachment H for the COBRA calendar. You can access this calendar on DPA's Web site at www.dpa.ca.gov (click on Benefits, then click on Dental or Vision Insurance, under COBRA Forms).

Updated February 14, 2011 at 3:34 PM.