Keeping Health Insurance After a Job Ends, and CalSavers

On this page: Health insurance after a job ends | Deadlines and notices | If your employer stops its plan | Retirement savings (CalSavers)

Health Insurance After a Job Ends

You may be able to keep your employer’s group health plan after your job ends, as long as you pay for it. It works after almost any job ending, including quitting, being fired, being laid off, retiring, or having your hours cut, and the one exception is gross misconduct. 29 U.S.C. § 1163(2) (opens in a new tab); Cal. Health & Safety Code § 1366.21(d)(2) (opens in a new tab). Which law helps you depends on how many people your employer has.

Continued health coverage by employer size.

Your employer has	Law	How long coverage lasts	What you pay
20 or more employees	Federal COBRA	Up to 18 months after a job ends or hours are cut. Up to 36 months for other events, such as divorce or a covered employee’s death.	The plan’s full cost plus up to two percent
19 or fewer employees (two to 19 eligible employees)	Cal-COBRA	Up to 36 months	The plan’s full cost plus up to 10 percent
One employee	Neither law applies by its terms	Your plan contract may still offer continued coverage.	Set by the plan

Deadlines and Notices

Under federal COBRA, you have at least 60 days to elect, counted from the later of the date your coverage ends or the date the plan sends the election notice. You do not have to pay your first premium until 45 days after you elect. Under Cal-COBRA, you must ask for coverage in writing within 60 days after the later of the date your coverage ends or the date the plan sent the notice, and you must pay your first premium within 45 days after you elect. 29 U.S.C. §§ 1162(3) (opens in a new tab), 1165(a)(1) (opens in a new tab); Cal. Health & Safety Code § 1366.24(b) (opens in a new tab).

Your employer generally has 30 days after your job ends to tell the plan, and the plan then has 14 days to send you the election papers. If your employer also runs the plan under federal COBRA, it has 44 days in all to send them. 29 U.S.C. § 1166(a)(2) (opens in a new tab), (c); Cal. Health & Safety Code § 1366.25(a) (opens in a new tab), (e); Cal. Ins. Code § 10128.55 (opens in a new tab); 29 C.F.R. § 2590.606-4(b)(2).

If you are a spouse or dependent, you may have to tell the plan yourself. Under federal COBRA, you must notify the plan administrator within 60 days after a divorce, a legal separation, or a child ceasing to be a dependent. Under Cal-COBRA, you must notify the plan in writing within 60 days after the employee’s death, a divorce or legal separation, loss of dependent status, or the employee’s Medicare eligibility. 29 U.S.C. § 1166(a)(3) (opens in a new tab); Cal. Health & Safety Code §§ 1366.21(d) (opens in a new tab), 1366.24(b) (opens in a new tab).

If you have a disability, the cost under Cal-COBRA can rise to 150 percent after the first 18 months, and if you used up federal COBRA, Cal-COBRA can add months, up to 36 in all.

If you elect COBRA in time, and pay your premium on or before the due date, your coverage generally runs from the date your employer coverage ended, so there is no gap. Treas. Reg. § 54.4980B-6, Q&A-3; Cal. Health & Safety Code § 1366.24(b) (opens in a new tab).

Every California employer, whatever its size, must also give you a state notice about the Health Insurance Premium Payment (HIPP) program when your job ends. HIPP is a Medi-Cal program that can help pay health insurance premiums. Cal. Lab. Code § 2807 (opens in a new tab).

Your employer may claim it fired you for gross misconduct to avoid offering coverage. If your employer told you that, or if you lost coverage and your employer never told you about your options, and it has affected you, contact Michael Trust Law, APC for help with resolving it.

If Your Employer Stops Its Plan

COBRA and Cal-COBRA depend on your employer’s plan. If your employer ends its group health plan altogether, or never offered one, continued coverage ends or never starts, because there is no plan to tie it to. If your employer switches carriers or plans, you generally move to the new plan for the rest of your coverage period. 29 U.S.C. § 1162(2)(B) (opens in a new tab); Cal. Health & Safety Code §§ 1366.23(b) (opens in a new tab), 1366.27(a)(7) (opens in a new tab), (b).

For more on losing a job, see Wrongful Termination, Leaves and Disability, and Employee Rights FAQs.

Retirement Savings (CalSavers)

If your employer does not offer a retirement plan, California may require it to sign you up for CalSavers, the state’s payroll-deduction retirement program. CalSavers enrolls you automatically unless you opt out. The CalSavers board sets the default savings rate, and the rate can change from year to year, but it currently starts at five percent of your pay. The money comes out of your paycheck, and you can opt out, so if you see CalSavers on your paystub and did not expect it, that is why. Cal. Gov’t Code §§ 100000 (opens in a new tab), 100032 (opens in a new tab).

When to Contact Us

If something at your job is not right and it has affected you, contact Michael Trust Law, APC. That includes a termination, a performance improvement plan, discipline, retaliation, discrimination, or harassment, whether you still work there or not. Deadlines to act can be short, so please call or email promptly. A no-charge consultation is a first conversation about your own situation, and we will tell you whether and how we can help.

No attorney-client relationship exists until a fee agreement is fully executed by all parties. See Disclaimers.

Cal. Health & Safety Code §§ 1366.20 (opens in a new tab)-1366.29 (opens in a new tab); Cal. Ins. Code §§ 10128.50 (opens in a new tab), 10128.55 (opens in a new tab); Cal. Lab. Code § 2807 (opens in a new tab); 29 U.S.C. §§ 1161 (opens in a new tab)-1163 (opens in a new tab), 1165 (opens in a new tab), 1166 (opens in a new tab); 29 C.F.R. § 2590.606-4; Treas. Reg. § 54.4980B-6; Cal. Gov’t Code §§ 100000 (opens in a new tab), 100032 (opens in a new tab).