You are here: California / Health and Safety Code - HSC / ARTICLE 4.5. California Cobra Program [1366.20. - 1366.29.] / Section 1366.25.


Section 1366.25. (Amended by Stats. 2009, Ch. 3, Sec. 4.)
Cite as: Cal. Health & Safety Code §1366.25.

(a) Every group contract between a health care service plan and an employer subject to this article that is issued, amended, or renewed on or after July 1, 1998, shall require the employer to notify the plan, in writing, of any employee who has had a qualifying event, as defined in paragraph (2) of subdivision (d) of Section 1366.21, within 30 days of the qualifying event. The group contract shall also require the employer to notify the plan, in writing, within 30 days of the date, when the employer becomes subject to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1161 et seq.

(b)Every group contract between a plan and an employer subject to this article that is issued, amended, or renewed on or after July 1, 1998, shall require the employer to notify qualified beneficiaries currently receiving continuation coverage, whose continuation coverage will terminate under one group benefit plan prior to the end of the period the qualified beneficiary would have remained covered, as specified in Section 1366.27, of the qualified beneficiary’s ability to continue coverage under a new group benefit plan for the balance of the period the qualified beneficiary would have remained covered under the prior group benefit plan. This notice shall be provided either 30 days prior to the termination or when all enrolled employees are notified, whichever is later.

Every health care service plan and specialized health care service plan shall provide to the employer replacing a health care service plan contract issued by the plan, or to the employer’s agent or broker representative, within 15 days of any written request, information in possession of the plan reasonably required to administer the notification requirements of this subdivision and subdivision (c).

(c)Notwithstanding subdivision (a), the group contract between the health care service plan and the employer shall require the employer to notify the successor plan in writing of the qualified beneficiaries currently receiving continuation coverage so that the successor plan, or contracting employer or administrator, may provide those qualified beneficiaries with the necessary premium information, enrollment forms, and instructions consistent with the disclosure required by subdivision (c) of Section 1366.24 and subdivision (e) of this section to allow the qualified beneficiary to continue coverage. This information shall be sent to all qualified beneficiaries who are enrolled in the plan and those qualified beneficiaries who have been notified, pursuant to Section 1366.24, of their ability to continue their coverage and may still elect coverage within the specified 60-day period. This information shall be sent to the qualified beneficiary’s last known address, as provided to the employer by the health care service plan or disability insurer currently providing continuation coverage to the qualified beneficiary. The successor plan shall not be obligated to provide this information to qualified beneficiaries if the employer or prior plan or insurer fails to comply with this section.

(d)A health care service plan may contract with an employer, or an administrator, to perform the administrative obligations of the plan as required by this article, including required notifications and collecting and forwarding premiums to the health care service plan. Except for the requirements of subdivisions (a), (b), and (c), this subdivision shall not be construed to permit a plan to require an employer to perform the administrative obligations of the plan as required by this article as a condition of the issuance or renewal of coverage.

(e)Every health care service plan, or employer or administrator that contracts to perform the notice and administrative services pursuant to this section, shall, within 14 days of receiving a notice of a qualifying event, provide to the qualified beneficiary the necessary benefits information, premium information, enrollment forms, and disclosures consistent with the notice requirements contained in subdivisions (b) and (c) of Section 1366.24 to allow the qualified beneficiary to formally elect continuation coverage. This information shall be sent to the qualified beneficiary’s last known address.

(f)Every health care service plan, or employer or administrator that contracts to perform the notice and administrative services pursuant to this section, shall, during the 180-day period ending on the date that continuation coverage is terminated pursuant to paragraphs (1), (3), and (5) of subdivision (a) of Section 1366.27, notify a qualified beneficiary who has elected continuation coverage pursuant to this article of the date that his or her coverage will terminate, and shall notify the qualified beneficiary of any conversion coverage available to that qualified beneficiary. This requirement shall not apply when the continuation coverage is terminated because the group contract between the plan and the employer is being terminated.

(g)(1)A health care service plan shall provide to a qualified beneficiary who has a qualifying event between September 1, 2008, and December 31, 2009, inclusive, a written notice containing information on the availability of premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5). This notice shall be sent to the qualified beneficiary’s last known address. The notice shall include clear and easily understandable language to inform the qualified beneficiary that changes in federal law provide a new opportunity to elect continuation coverage with a 65-percent premium subsidy and shall include all of the following:

(A)The amount of the premium the person will pay. For qualified beneficiaries who had a qualifying event between September 1, 2008, and the effective date of this subdivision, inclusive, if a health care service plan is unable to provide the correct premium amount in the notice, the notice may contain the last known premium amount and an opportunity for the qualified beneficiary to request, through a toll-free telephone number, the correct premium that would apply to the beneficiary.

(B)Enrollment forms and any other information required to be included pursuant to subdivision (e) to allow the qualified beneficiary to elect continuation coverage. This information shall not be included in notices sent to qualified beneficiaries currently enrolled in continuation coverage.

(C)A description of the option to enroll in different coverage as provided in subparagraph (B) of paragraph (1) of subdivision (a) of Section 3001 of Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5). This description shall advise the qualified beneficiary to contact the covered employee’s former employer for prior approval to choose this option.

(D)The eligibility requirements for premium assistance in the amount of 65 percent of the premium under Section 3001 of Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(E)The duration of premium assistance available under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(F)A statement that a qualified beneficiary eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) may elect continuation coverage no later than 60 days of the date of the notice.

(G)A statement that a qualified beneficiary eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) who rejected or discontinued continuation coverage prior to receiving the notice required by this subdivision has the right to withdraw that rejection and elect continuation coverage with the premium assistance.

(H)A statement that reads as follows:

IF YOU ARE HAVING ANY DIFFICULTIES READING OR UNDERSTANDING THIS NOTICE, PLEASE CONTACT [name of health plan] at [insert appropriate telephone number].

(2)With respect to qualified beneficiaries who had a qualifying event between September 1, 2008, and the effective date of this subdivision, inclusive, the notice described in this subdivision shall be provided within the later of 14 calendar days of the effective date of this subdivision or seven business days after the date the plan receives notice of the qualifying event.

(3)With respect to qualified beneficiaries who had or have a qualifying event between the day after the effective date of this subdivision, and December 31, 2009, inclusive, the notice described in this subdivision shall be provided within the period of time specified in subdivision (e).

(4)For purposes of compliance with the notice requirements of this subdivision, the department may designate a model notice or notices that may be used by health care service plans. Use of the model notice or notices shall not require prior approval by the department. Any model notice or notices designated by the department for purposes of this subdivision shall not be subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(5)Nothing in this section shall be construed to require a health care service plan to provide the plan’s evidence of coverage as a part of the notice required by this subdivision, and nothing in this section shall be construed to require a health care service plan to amend its existing evidence of coverage to comply with the changes made to this section by the act amending this section during the first year of the 2009–10 Regular Session.

(h)(1) Notwithstanding any other provision of law, a qualified beneficiary eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) may elect continuation coverage no later than 60 days after the date of the notice required by subdivision (g).

(2)For a qualified beneficiary who elects to continue coverage pursuant to paragraph (1), the period beginning on the date of the qualifying event and ending on the effective date of the continuation coverage shall be disregarded for purposes of calculating a break in coverage in determining whether a preexisting condition provision applies under subdivision (c) of Section 1357.06 or subdivision (e) of Section 1357.51.

(3)For a qualified beneficiary who had a qualifying event between September 1, 2008, and February 16, 2009, inclusive, and who elects continuation coverage pursuant to paragraph (1), the continuation coverage shall commence on the first day of the month following the election.

(4)For a qualified beneficiary who had a qualifying event between February 17, 2009, and the effective date of this subdivision, inclusive, and who elects continuation coverage pursuant to paragraph (1), the effective date of the continuation coverage shall be either of the following, at the option of the beneficiary, provided that the beneficiary pays the applicable premiums:

(A)The date of the qualifying event.

(B)The first day of the month following the election.

(i)Notwithstanding any other provision of law, a qualified beneficiary eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) may elect to enroll in different coverage subject to the criteria provided under subparagraph (B) of paragraph (1) of subdivision (a) of Section 3001 of Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(j)A qualified beneficiary enrolled in continuation coverage as of February 17, 2009, who is eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) may request application of the premium assistance as of March 1, 2009, or later, consistent with Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(k)A health care service plan that receives an election notice from a qualified beneficiary eligible for premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), pursuant to subdivision (h), shall be considered a person entitled to reimbursement, as defined in Section 6432(b)(3) of the Internal Revenue Code, as amended by paragraph (12) of subdivision (a) of Section 3001 of Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(l)(1)For purposes of compliance with Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), in the absence of guidance from, or if specifically required for state-only continuation coverage by, the United States Department of Labor, the Internal Revenue Service, or the Centers for Medicare and Medicaid Services, a health care service plan may request verification of the involuntary termination of a covered employee’s employment from the covered employee’s former employer or the qualified beneficiary seeking premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(2)A health care service plan that requests verification pursuant to paragraph (1) directly from a covered employee’s former employer shall do so by providing a written notice to the employer. This written notice shall be sent by mail or facsimile to the covered employee’s former employer within seven business days from the date the plan receives the qualified beneficiary’s election notice pursuant to subdivision (h). Within 10 calendar days of receipt of written notice required by this paragraph, the former employer shall furnish to the health care service plan written verification as to whether the covered employee’s employment was involuntarily terminated.

(3)A qualified beneficiary requesting premium assistance under Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) may furnish to the health care service plan a written document or other information from the covered employee’s former employer indicating that the covered employee’s employment was involuntarily terminated. This document or information shall be deemed sufficient by the health care service plan to establish that the covered employee’s employment was involuntarily terminated for purposes of Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5), unless the plan makes a reasonable and timely determination that the documents or information provided by the qualified beneficiary are legally insufficient to establish involuntary termination of employment.

(4)If a health care service plan requests verification pursuant to this subdivision and cannot verify involuntary termination of employment within 14 business days from the date the employer receives the verification request or from the date the plan receives documentation or other information from the qualified beneficiary pursuant to paragraph (3), the health care service plan shall either provide continuation coverage with the federal premium assistance to the qualified beneficiary or send the qualified beneficiary a denial letter which shall include notice of his or her right to appeal that determination pursuant to Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).

(5)No person shall intentionally delay verification of involuntary termination of employment under this subdivision.

(m)The provision of information and forms related to the premium assistance available pursuant to Title III of Division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5) to individuals by a health care service plan prior to the effective date of this subdivision shall not be considered a violation of this chapter provided that the plan complies with all of the requirements of this article.



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