California Extension of COBRA -- AB 1401

California law, Assembly Bill 1401, requires that  the COBRA eligibility period be extended to 36 months from the original event date and be provided to individuals who have exhausted their federal COBRA eligibility period, normally 18 months or, in the case of an individual certified by the Social Security Administration as disabled, 29 months.  To be eligible for this extension the federal COBRA coverage must have started on or after January 1, 2003.  Consequently, no individual shall be covered under the AB 1401 continuation coverage until July 1, 2004.

Employers are responsible for notifying the COBRA qualified beneficiaries of their rights under  AB 1401 and for directing them to the appropriate health care service plan or health insurer.  Health care service plans and health insurers are responsible for the collection of the required premiums.  The premium for such extended coverage may not exceed 110% of the applicable rate charged for a covered employee or, in case of dependent coverage, not more than 110% of the applicable rate charged to a similarly situated individual under the group benefit plan being continued under the group contract.  Those individuals deemed to be disabled by the Social Security Administration may be charged up to 150% of the applicable rate after the first 18 months of continuation coverage..

California COBRA AB 1401 brief summary:

• AB 1401 is effective for policies effective, renewing or amending on or after September 3, 2003.
  
• Applies to individuals who began their  COBRA  coverage on or after January 1, 2004.
  
• COBRA participants must exhaust their initial 18-month or, in the case of disability, 29-month coverage period.
  
• No individual shall be covered under the AB 1401 continuation coverage until July 1, 2004.
  
• Pertains only to insured plans, not self-insured plans,
  
• Pertains only to medical plans, not stand alone dental or vision plans.
  
• Extension of coverage only needs to be offered if original COBRA coverage was less then 36 months.  Spouses and dependent children who originally are offered 36 months of COBRA coverage are not eligible for the extension under AB 1401.
  
• Premiums cannot exceed 110% of applicable rate (except in relation to disability where it is up to 150%).
  
• Maximum coverage period is 36 months from the original COBRA commencement date.