Federal COBRA applies to employers with 20 or more employees. In California, employees of smaller employers who lose group health coverage may obtain continuation coverage through:

Why C is correct

California's Cal-COBRA fills the gap left by federal COBRA by providing continuation coverage to employees of smaller employers, generally those not covered by the federal 20-employee threshold. Group plans subject to California's continuation law must offer qualified beneficiaries the right to continue coverage after a qualifying event such as termination of employment. Cal-COBRA is a California-specific rule and a tested distinction from federal COBRA's 20-employee trigger. Cal-COBRA fills the gap left by federal COBRA, which stops at employers with 20 or more employees. For California employers of 2 to 19 employees, Cal-COBRA generally provides up to 36 months of continuation coverage, and it also requires a conversion right to an individual policy at the end of that period in many cases.

Why the other options are wrong

• D) Medicare Part D is prescription drug coverage for Medicare beneficiaries; it has nothing to do with small-employer continuation. Medicare Part D is prescription drug coverage for Medicare beneficiaries and has no role in continuing a small-group employee's employer coverage.
• A) Guaranteed renewable is a policy renewability feature, not a continuation-coverage program. Covered California is the individual and small-group exchange, and its guaranteed renewable provision says nothing about group continuation coverage after employment ends.
• B) California prohibits self-funded association health plans marketed to small employers; there is no such program to turn to. California's small-group continuation mechanism is Cal-COBRA, not a self-funded association plan program operated by the state.

Memory hook

COBRA for the little guys is Cal-COBRA: continuation coverage when the 20-employee federal floor doesn't apply.