Cal-COBRA, California's state continuation coverage law, provides:

Why A is correct

Cal-COBRA extends continuation coverage to employees, spouses, and dependents of small employers in California. Federal COBRA generally applies to employers with 20 or more employees, so Cal-COBRA fills the gap for small employers, allowing those who lose group coverage to continue it for a defined period by paying the premium. Agents must be familiar with both federal COBRA and Cal-COBRA because the applicable rules depend on the employer's size.

Why the other options are wrong

• B) Cal-COBRA is private continuation coverage financed by the premiums of those who elect it, not a government-run plan.
• C) Medicare is a federal program for the elderly and disabled; Cal-COBRA is unrelated to Medicare.
• D) Cal-COBRA continues existing group coverage; it does not subsidize premiums for individual market policies.

Memory hook

Federal COBRA starts at 20 employees; Cal-COBRA fills the gap for California's small groups.

Why A is correct

Cal-COBRA is California's continuation coverage law that extends group health coverage for employees of small employers — generally those below the size threshold that triggers federal COBRA — after a qualifying event such as termination of employment. It mirrors the structure of federal COBRA at the state level, preserving access to the same group plan for a limited period while the employee transitions to other coverage. When federal COBRA does not apply because of the employer's size, Cal-COBRA is the correct state-law mechanism for continuation, making A the right answer.

Why the other options are wrong

• B) Medicare Part C is a Medicare Advantage product available to Medicare-eligible persons; it provides no continuation of employment-based group coverage for employees of any size. Medicare Advantage serves Medicare-eligible individuals and provides no employer-plan continuation.
• C) Medi-Cal is a Medicaid program for low-income individuals who meet income and categorical eligibility rules; it is not a continuation of the employer's group plan. Medi-Cal eligibility is income-based and does not continue a terminated employer plan.
• D) Medigap open enrollment rights attach to enrollment in Medicare Part B for those 65 and older, not to the termination of a small employer's group health plan. Medigap rights arise from Part B enrollment and are unrelated to group plan termination.

Memory hook

COBRA is the federal umbrella; Cal-COBRA is the California umbrella for the smaller shops.

Why C is correct

Cal-COBRA provides continuation coverage to employees and qualified dependents of small California employers whose groups are too small to trigger federal COBRA. When an employee loses coverage due to a qualifying event such as termination of employment, the group policy must offer the same coverage on a continued basis for a specified period at the applicable premium, often a premium the employee pays. Federal COBRA's absence does not leave the employee without protection in California.

Why the other options are wrong

• A) Continuation under Cal-COBRA requires payment of the premium; it is not free, and it does not convert to an individual policy automatically.
• B) Covered California is an ACA marketplace option, but it is not the mandated continuation remedy when group coverage ends.
• D) California law steps in where federal COBRA does not reach, so continuation rights do exist for small employer groups.

Memory hook

Too small for federal COBRA? Cal-COBRA still gives continuation coverage. Small employers, same protection.