Cal-COBRA application to non-CA employers

[Guest Lynnemarie]

A D.C.-based employer has an office in California. Firm is subject to federal COBRA, wonders if it needs to offer the Cal-COBRA extension to the CA-based employees. Insurance contract was issued in D.C. so carrier says no. I can't tell from the assembly bill. Has anyone else researched? Thanks.

[mbozek]

The california extension of COBRA applies to employers who maintain insured health plans for employees working in Cal. It is not related to where the contract was issued. Employer maintaining insured plans for cal. employees need to consult counsel to determine if the Cal extension is preempted by ERISA. The earliest that the additonal coverage will have to be offered is July 1, 2004 since the law only applies to employees terminated on or after 1/1/03 who have exhaused their federal COBRA benefits.

[Guest Lynnemarie]

Thanks.

[Guest Kathleen Meagher]

Cal-COBRA regulates insurance companies and HMOs, not employers. (If the law imposed any requirements on employers with respect to health care, it would be preempted by ERISA.) So it would not apply to a health plan that was not subject to California insurance law.

I'm not an expert in Cal. insurance law, so I don't know if the state Dept. of Ins has any regulatory authority over out-of-state contracts that cover California employees. If so, then I think Cal-COBRA would apply in this case.

[GBurns]

I thought that Cal-COBRA just like COBRA applies to employers not insurance companies and HMOs.

I thought COBRA applied to insurance coverage/arrangements not to health plans.

The employees are sited in CA and are subject to CA labor and many other applicable CA laws and ERISA does not pre-empt state law in many cases.

Whether an out of state contract or not insurance contracts covering residents of states are covered by state insurance laws in most states.

ERISA does not pre-empt state law regulating insurance, it might pre-empt regarding benefits provided by a plan. A plan is not the insurance contract. The benefits from a plan are not the benefits from the insurance contract.

[Guest Lynnemarie]

We talked to CA Dept. of Insurance. Cal-COBRA (as well as other health insurance regs) when majority of employees not in CA. Insurance carriers polled (it is an insurance plan requirement, not ER) said it would not apply due to contract situs (not CA).

Many thanks for your responses.

[Guest Lynnemarie]

Sorry, just read my post. Meant to say Cal-COBRA does not apply since majority of ees not in CA. Insurance companies agree based on situs of contract.

[Steve72]

GBurns:

"I thought that Cal-COBRA just like COBRA applies to employers not insurance companies and HMOs.

I thought COBRA applied to insurance coverage/arrangements not to health plans."

My understanding is that Cal-COBRA is an insurance law that governs contracts of group insurance issued in California.

COBRA applies to the plan sponsor. A plan sponsor may not offer a group health plan (insured or uninsured) that does not comply with COBRA.

We may very well be saying the same thing here.