An employee of a 10-person California company loses group health coverage when employment ends. The employer's plan is not subject to federal COBRA. Which statement about California continuation coverage (Cal-COBRA) is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Cal-COBRA — California continuation coverage under the Knox-Keene Act and related insurance code provisions — extends continuation rights to employees of small California employers whose groups are too small to trigger federal COBRA. When employment ends, the group plan must generally offer the former employee and eligible dependents the right to continue group coverage for a defined period, typically mirroring federal COBRA durations, with the covered person paying the premium (often up to 100% plus a small administrative charge). The employee must elect and pay for continuation; it is not automatic and not free.
Why the other options are wrong
- B) Cal-COBRA exists precisely to fill the gap for small California groups; small group size triggers California continuation rights rather than ending them.
- C) Continuation coverage is a guaranteed right, not subject to health underwriting; the former employee simply elects coverage and pays the premium.
- D) The former employee must pay the premium for continuation coverage; it is not provided free of charge.
Memory hook
Too small for federal COBRA? California steps in: continuation still applies for small groups.