California Group Life and Health Insurance Requirements

California has extensive regulations governing group life and health insurance, with some of the strongest employee protections in the nation.

Group Life Insurance Requirements

Conversion Privilege

California requires group life policies to include a conversion privilege:

When Conversion Rights Apply

Employees have conversion rights when:

• Employment is terminated (voluntary or involuntary)
• Employee retires
• Employee's class is eliminated
• Group policy is terminated (with proper notice)
• Dependent loses coverage status

Exam Tip: The 31-day conversion period is a key California requirement. During this period, the employee remains covered under the group policy even if they haven't yet applied to convert.

Death During Conversion Period

If an employee dies during the 31-day conversion period:

• Group coverage still applies
• Death benefit is paid as if coverage continued
• Conversion application status is irrelevant

Small Group Market Definition

California's Expanded Definition

California defines small groups more broadly than federal law:

Small Group Protections

California small group plans must provide:

• Guaranteed issue (cannot deny coverage)
• No pre-existing condition exclusions
• Essential health benefits
• Mental health parity
• Guaranteed renewal

California Mental Health Parity

California requires mental health parity in group health plans:

Parity Requirements

Covered Conditions

California parity covers:

• Schizophrenia
• Bipolar disorder
• Major depressive disorder
• Obsessive-compulsive disorder
• Panic disorder
• Autism spectrum disorders
• Substance use disorders
• Other severe mental illnesses

Network Requirements

Insurers must provide:

• Adequate network of mental health providers
• Same access standards as medical providers
• Timely access to treatment

Certificate of Coverage Requirements

California requires detailed certificates:

Required Contents

Timing of Certificate Delivery

• Within 15 days of coverage effective date
• Updated certificate for material changes
• Summary of Benefits and Coverage (SBC) also required

Dependent Coverage Requirements

Age 26 Coverage

California follows federal requirements for dependent coverage:

Domestic Partner Coverage

California requires domestic partner coverage:

• Same coverage as married spouses
• Same premium contribution rules
• Same COBRA/Cal-COBRA rights
• Tax treatment differs from spouse coverage

Coordination of Benefits

When employees have multiple group plans:

California Coordination Rules

Birthday Rule Details

The birthday rule determines which parent's plan is primary for children:

• Uses parent's birthday month and day (not year)
• Earlier birthday in calendar year = primary plan
• If same birthday, parent covered longer is primary

Employer Contribution Requirements

Minimum Participation

Small Employer Rules

Small employers may have different participation requirements:

• May have lower minimum participation
• Guaranteed issue regardless of participation
• Cannot be charged more for low participation

Exam Tip: California's small group market includes employers with 1-100 employees, which is broader than the federal 1-50 definition. This expands guaranteed issue protections.