Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a covered group health plan must offer an opportunity to continue health plan coverage to each qualified beneficiary who would otherwise lose coverage under the plan as a result of a qualifying event.

The California Continuation Benefits Replacement Act of 1997 (Cal-COBRA) is an expansion of federal COBRA coverage. It requires insurance carriers and Health Maintenance Organizations (HMOs) to provide COBRA-like coverage to employees of smaller companies (two to 19 employees) in California who aren't subject to federal COBRA provisions.