Employees of a small California employer that is not subject to federal COBRA may have group health continuation rights through:

Why A is correct

California provides its own continuation coverage law, commonly called Cal-COBRA, that extends group health coverage for employees of small employers who are not covered by federal COBRA because their employer has fewer than 20 employees. The state law mirrors COBRA's protections so that losing group coverage does not leave small-business employees without options. Beneficiaries who exhaust federal COBRA may also have Cal-COBRA rights in some circumstances. Continuation coverage is not the same as Medicare, HIPAA portability, or workers' compensation, and it is purchased through the group policy with the employee paying the full premium share.

Why the other options are wrong

• B) Medicare is federal health coverage for people 65 and older or with qualifying disabilities, not a small-group continuation program.
• C) HIPAA portability limits the use of preexisting condition exclusions for those changing group coverage; it does not continue the old plan.
• D) Workers' compensation covers job-related injuries and illnesses, not continuation of group health benefits after leaving a job.

Memory hook

Too small for COBRA? Cal-COBRA is California's safety net for small employer groups.

Why A is correct

Federal COBRA requires group health continuation coverage for employers with 20 or more employees. Cal-COBRA closes the gap by granting similar continuation rights to employees of smaller employers that fall below the federal threshold, allowing them to keep group coverage for a defined period after leaving employment or losing coverage. It is state law layered on top of, not replacing, federal COBRA, so the two laws work together to cover the full spectrum of employers. The exam tests Cal-COBRA as one of the state legislative impacts on group health plans alongside ERISA, HIPAA, and mental health parity rules.

Why the other options are wrong

• B) Cal-COBRA supplements federal COBRA by covering smaller employers; it does not displace the federal scheme where COBRA already applies, and larger employers remain governed by federal COBRA.
• C) Medicare counseling is the function of HICAP, the federally authorized and state-administered counseling program, not of the Cal-COBRA continuation statute.
• D) Cal-COBRA protects employees of private smaller employers in the group market. It is not limited to state government employees, who have their own public employee benefit rules.

Memory hook

Cal-COBRA = mini-COBRA for the little guys federal COBRA leaves out.