COBRA and state continuation are both laws that allow employees to continue health coverage under their company's group plan after they've been dismissed or have had their employment status change from full- to part-time.
For the employee, their plan will stay the same and the main difference is that they will pay their entire health premium plus an administrative fee. The insurance carriers charge an administrative fee for continuation coverage, so employees may find more affordable coverage on their state's individual market. HealthSherpa is a recommended resource that helps people shop the individual market. They’ll help with enrollment and find subsidies that your employees may be entitled to. They also have an online portal where employees can make changes to coverage, payments, and renew their plans.
Federal COBRA
The consolidated omnibus budget reconciliation act (COBRA) is a federal program that provides temporary continuation of health insurance when employer-sponsored coverage is lost. Employers with 20+ employees are required to offer COBRA as part of their group health plan. Learn more about COBRA from the US Department of Labor's website.
State continuation
While the federal COBRA law applies only to employers with 20 or more employees, smaller employers are often subject to state continuation laws. Many states have developed their own version of continuation coverage, which is often referred to as state continuation or “mini” COBRA. By using mini-COBRA rules, states can require smaller employers to offer at least some coverage continuation. Mini-COBRA rules can also expand on the federal COBRA rules that apply to larger employers.
Is my company subject to federal COBRA or state continuation?
Whether a company is subject to federal COBRA or state continuation is generally determined by the number of full-time and full-time equivalent employees that you have.
If Gusto's the broker of your insurance benefits, we automatically determine whether your company's subject to federal or state continuation.
Federal COBRA eligibility
State continuation eligibility
Depending on size, companies are either subject to federal or state continuation coverage. For small California companies subject to state continuation, Cal-COBRA is a way for employees to continue health insurance after they leave the company.
Here's how the Cal-COBRA timeline works:
If you enroll in Cal-COBRA: make sure to find out what your company’s renewal date is for the coverage. The carriers don’t inform Gusto about who is enrolled in your company’s Cal-COBRA, so reach out to us if you want to stay enrolled in continuation coverage after your company’s renewal date. Email [email protected] 1-2 months before your company’s renewal date and we’ll make sure you have access to the new plan year’s benefits.
Cal-COBRA is administered directly through the health insurance carriers, so follow the instructions below to submit your enrollment. Reach out to your insurance carrier with any questions.
Note: employees are responsible for enrolling and confirming coverage details directly with the insurance carrier. We've included carrier info below for your convenience, but refer to your carrier for the most up-to-date enrollment intructions.
Aetna
Call Aetna’s member services line at (800) 464-4000 to request your Cal-COBRA enrollment packet and confirm your mailing address. Make sure to specify that you’re asking about the Cal-COBRA enrollment process. The packet normally takes 10-12 business days to arrive. If you haven’t received it after 12 business days, you can call (800) 297-7145. Once you receive the packet, fill out the forms and return them to Aetna. You’ll work with Aetna directly for all billing and enrollment. If you have any questions, please call Aetna’s member services line.
Anthem
Anthem automatically sends a Cal-COBRA letter to your mailing address after your last day of coverage. If you didn’t receive the letter, you can call (855) 854-1429 and request the letter be emailed to you. Once you receive the form, complete it and email it back to Anthem at [email protected]. You can also enroll over the phone for a $10 fee once you receive your enrollment form. If you have any questions, call Anthem at (855) 854-1429.
Beam Dental
Beam will mail your Cal-COBRA enrollment packet to the mailing address that they have on file. Once you receive this packet, you can email [email protected] or call (800) 648-1179 to enroll or ask any questions. Beam will set up an open enrollment for you, which is their policy for all Cal-COBRA enrollees.
Blue Shield of California
You can email [email protected] and we’ll ask Blue Shield of California to mail you a Cal-COBRA packet. Once you receive the packet, fill out the forms and email them to [email protected] AND [email protected]. To follow up, ask questions, or expedite your enrollment, call (800) 228-9476. Tip: if you enter your Social Security number and date of birth, then ignore all prompts and say “other reason,” you’ll be connected to a representative.
California Choice
CalChoice administers Cal-COBRA through a third party called Conexis WageWorks. After your termination, they should have sent paperwork to your mailing address that will allow you to sign up with Conexis. If you have any questions or haven’t received the paperwork, you can call CalChoice member services at (800) 558-8003.
CoPower
CoPower will send you a Cal-COBRA packet to the mailing address that they have on file. Follow the instructions in the packet to enroll. You can call CoPower’s member services at at (888) 920-2322 with questions or to expedite your enrollment.
Covered California
Covered California sends a Cal-COBRA packet to your mailing address 10-14 days after the termination or reduction in hours is processed. Follow the instructions in the packet to submit your enrollment. Contact Covered California with questions at [email protected] or (877) 453-9198.
Delta Dental
The monthly cost of your dental Cal-COBRA coverage will be 110% of your normal premium. Contact the carrier with any questions at (415) 989-7443 or [email protected].
Dental Select
The monthly cost of your dental Cal-COBRA coverage will be 110% of your normal premium. Contact the carrier with any questions at (800) 999-9789 or [email protected].
Eye Med
Eye Med will send you a Cal-COBRA packet to the mailing address that they have on file. If you don’t receive the packet in 7-10 business days after your dismissal, you can call (888) 439-3633 to request it. Once you receive the packet, fill it out and email it to [email protected].
Guardian
Guardian will mail you a Cal-COBRA packet to the mailing address that they have on file. If you don’t receive the packet within 7-10 business days after your dismissal, you can call (800) 541-7846 to request it. Once you receive the packet, fill it out and email it to Guardian at [email protected]. If you have any questions or would like to start the enrollment process, call Guardian at the number listed above.
Health Net
The monthly cost of your Cal-COBRA coverage will be 110% of your normal premium. If you have any questions, call Health Net at (800) 224-8808 or the number on the back of your insurance card.
Inshore
Inshore will send a Cal-COBRA packet to the mailing address they have on file for you. Once you receive the packet, follow the instructions to enroll Cal-COBRA coverage. Contact Inshore at [email protected].
Kaiser Permanente
You can call Kaiser at member services (800) 464-4000 to let them know you are interested in coverage and to request your Cal-COBRA packet. Make sure to specify that you’re asking about the Cal-COBRA enrollment process. If you have any questions, contact Kaiser at the number above.
MetLife
Once you receive your Cal-COBRA packet, return the attached form to [email protected]. If you have any questions you can reach MetLife at (800) 275-4638 or (800) 942-90854.
Principal
Principal automatically sends your Cal-COBRA forms upon termination. Follow the instructions in the paket to enroll. Contact Principal with any questions at (800) 843-1371.
Sharp Health Plan
Sharp Health Plan mails your Cal-COBRA forms to the address we have on file. Once you receive the forms, follow the instructions in the packet to enroll. If you have any questions, email [email protected].
UnitedHealthcare
Your Cal-COBRA notice is automatically generated within 5 business days of your termination and sent to your mailing address. Once you’ve received it, you can go to www.uhcservices.com to register and make payments. Call (866) 747-0048 with any questions.
VSP
VSP sends your Cal-COBRA packet to the mailing address that they have on file. Once you receive it, follow the instructions in the packet to enroll. If VSP says that Gusto must send an enrollment form on your behalf, let us know at [email protected]. If you have any questions, call VSP's member services at (800) 877-7195.
If your health benefits are managed by Gusto, read below to learn what we'll do to help with federal COBRA and state continuation. If your health benefits are NOT managed by Gusto, you'll need to work with your insurance carrier directly to handle COBRA.
For federal COBRA:
For state continuation:
Cost of continuation coverage
Costs will vary by plan. The employee is responsible for paying 100% of the premium plus additional administration fees. If they choose to enroll, the payment between the employer and former employee is to be managed outside of Gusto.
Plan options
Employees are only eligible to enroll in lines of coverage they were actively enrolled in at the time of termination (i.e. if they previously waived dental coverage, they can’t enroll in dental COBRA coverage). However, if they were previously enrolled in more than one line of coverage (i.e. medical and dental) they can choose which lines to continue from the options available (i.e. continue medical and drop dental).