Question 84

A California employer with 5 employees is subject to Cal-COBRA.

In California, employers with 5 or more employees are subject to Cal-COBRA, which offers extended health coverage options to employees who lose their group health insurance under certain circumstances.

A) Subject to COBRA

This option is incorrect because COBRA (Consolidated Omnibus Budget Reconciliation Act) applies to employers with 20 or more employees. Since the employer in question has only 5 employees, they do not meet the threshold to be subject to COBRA.

B) Subject to Cal-COBRA

This option is correct as Cal-COBRA specifically extends coverage to employers in California with 5 or more employees, allowing former employees and their dependents to continue their health insurance coverage after a qualifying event.

C) Exempt from state continuation

This option is incorrect because the employer is not exempt from state continuation laws. With 5 employees, they are subject to Cal-COBRA, which mandates continuation coverage for eligible individuals.

D) Required to offer group health

This option is partially incorrect. While the employer may be required to offer group health insurance if they have 5 employees, the question specifically asks about continuation coverage, which is addressed by Cal-COBRA rather than the initial requirement to offer insurance.

Conclusion

The correct answer is B, as Cal-COBRA applies to California employers with 5 or more employees, ensuring that they must provide continuation coverage. Options A, C, and D fail to align with the stipulations set forth by California law regarding health insurance continuation, making them incorrect in this context.