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The Consolidated Benefits (CoBen) Program is administered by the California Department of Human Resources (CalHR) Benefits Division. Departments are responsible for ensuring employees are provided information regarding the CoBen benefit. This manual provides departments with information regarding eligibility, enrollment, and available benefits under the CoBen program. The two types of benefits presented under the CoBen program are:
The CoBen Program Benefit Allowance is automatically
established in the State Controller’s Office (SCO) payroll system to offset the
cost of health, dental, and vision benefits for eligible employees
The CoBen Program Cash Option is a cash payment option which is paid in lieu of maintaining state-sponsored health or health and dental benefits. This option is available to eligible state employees. Departments are responsible for assisting employees who wish to enroll in CoBen Cash and ensuring the appropriate documents are completed correctly and timely.
The CoBen Handbook provides an overview of the program and how it works. The CoBen Handbook should be made available to eligible employees. Personnel Offices may go to the CalHR Benefits Division website to download copies of the CoBen Handbook for employees who do not have internet access.
The state will establish one combined employer contribution amount for an employee's health, dental, and state-sponsored vision benefits. The employees' benefit allowance is automatically established in the SCO payroll system and no enrollment form is required. The full premium amount is based on the health, dental, and vision plans the employee chooses and is deducted from the employee's benefit allowance. Eligible employees are automatically enrolled in the state's vision plan. The vision benefit is mandatory under CoBen and eligible employees may not cancel their state-sponsored vision coverage.
The employee's benefit allowance will depend on the number of dependents that the employee covers. If an employee is enrolled in both a state-sponsored health and dental plan, their health benefit enrollment party code will determine the benefit allowance they will receive.
If the total cost of the employee's health, dental, and vision plans is less than the benefit allowance, the employee will receive the difference as taxable cash (excess cash) in their paycheck. The excess cash amount will be subject to state, federal, and social security taxes. In order to receive excess cash, employees must be enrolled in health, dental, and vision benefits. If employees are not enrolled in all three benefits, they will not be eligible to receive excess cash.
If the total cost of the employee's health, dental, and vision plans is more than their benefit allowance, the employee will pay the difference (out-of-pocket) with pre-tax dollars automatically deducted from their paycheck. The out-of-pocket amount will not be subject to state, federal, and social security taxes.
If an employee enrolls in health and vision only, they will receive the lesser of the total premium cost or the CoBen allowance amount.
If an employee elects to receive cash in lieu of their state-sponsored health plan but enrolls in a state-sponsored dental plan, the benefit allowance will be the amount of their dental and basic vision premium. In this situation, the employee will receive cash in lieu of qualifying group health coverage and the dental and vision premium will be fully paid. The employee will not have an out-of-pocket dental and vision premium cost.
The CoBen Program Benefit Allowance will automatically stop at the time of retirement, separation, or loss of eligibility. At retirement, the health and dental deduction (if any) will be shown as the state share and retiree share of the applicable premiums. The Personnel Office is required to offer COBRA continuation for state-sponsored vision coverage at the time of retirement. The state will continue to fully pay the state-sponsored basic vision premium for eligible active employees.
The CoBen allowance for represented employees is determined through collective bargaining. The collective bargaining process is fluid and the CoBen allowance for represented employees may change. CalHR will notify departments if there are changes to these rates.
Benefits Calculator helps employees in CoBen determine how much will be deducted from or added to their paycheck based on which health and dental plans they choose. State vision coverage is mandatory under CoBen and the vision amount is automatically added into the calculation.
The CoBen handbook includes a worksheet that employees may fill out to help them calculate their benefit costs. However, the CoBen calculator has the advantage of being easier to use and allowing employees to try different scenarios. An employee simply clicks on his or her health and dental plan choices and indicates how many dependents will be covered. The calculator automatically computes the total cost of the benefits and subtracts it from the CoBen allowance. The result shows whether the employee will have a monthly benefit deduction or receive extra cash and the amount of the deduction or cash.
Employees may elect to receive cash in lieu of their state- sponsored health insurance or health and dental insurance plan. Employees may not elect to receive cash in lieu of dental coverage only. Employees must certify they have qualifying group health and/or dental coverage through a spouse, domestic partner, or another source to be eligible for the cash option.
Group coverage is typically maintained by an employer or employee organization and must conform to the federal Affordable Care Act's (ACA's) minimum value standards. The ACA establishes a minimum value standard of benefits for health plans. For a qualifying group health plan to meet the ACA's minimum value standards, the plan must cover at least 60 percent of the total allowed costs of benefits provided under the plan.
All CalPERS-sponsored health plans meet the minimum value standards. Employees covered under individual coverage, such as TRICARE, Medicare, Medi-Cal and Covered California are not eligible for the CoBen Cash, even if they meet the minimum value standards.
Cash Option payments are taxable and the amounts are listed below:
Employees in CoBen are eligible for the CoBen Cash Option in lieu of health or health and dental benefits, therefore, they are not eligible for the state's FlexElect Cash Option Program. Retired employees are not eligible for CoBen Cash.
Employees who are not currently enrolled in the CoBen Cash Option and wish to enroll in the Cash Option for the next Plan Year, must complete a Consolidated Benefits (CoBen) Cash Enrollment Election (STD. 702) during the open enrollment period or as newly eligible. The CoBen Cash Plan Year is January 1 through December 31.
Employees who are currently enrolled in the Cash Option will be automatically reenrolled into the Cash Option for the next plan year. It is not necessary for these employees to complete a Consolidated Benefits (CoBen) Cash Enrollment Election (STD. 702) during a CoBen Cash Open Enrollment Period, unless they wish to cancel or change their Cash Option Enrollment.
Under the Internal Revenue Code governing the CoBen Program, employees who enroll or make changes to their Cash Option during an Open Enrollment Period may cancel or change their election through December 31. This rule also applies to employees who are automatically reenrolled in the Cash Option. Accordingly, if employees wish to cancel their automatic Cash Option reenrollment after the Open Enrollment Period has ended, they may do so, provided it is done on or before December 31 in the same year.
Eligible employees enrolled in CoBen Cash may also enroll in the state's FlexElect Dependent Care Reimbursement Account and/or Medical Reimbursement Account. Departments should reference the Benefits Administration Manual (BAM) Section 700 for the FlexElect Reimbursement Accounts eligibility and enrollment criteria.
Permanent-Intermittent (PI) employees wishing to participate in the Cash Option will not have their enrollment automatically continued. PI employees are required to complete a STD. 702 each year they wish to receive the Cash Option.
If the employee is not enrolled in a state-sponsored health and/or dental plan at the time of their death, then the surviving spouse and dependents cannot enroll in a medical or dental plan unless the California Public Employees' Retirement System (CalPERS) determines they are eligible for survivor benefits.
Employees who are eligible to receive survivor benefits after the death of the spouse or domestic partner can continue to receive CoBen Cash.
Employees in CoBen do not serve the state Dental Program's Delta Dental 24-month restriction period. Newly hired employees and those employees who transfer from a Bargaining Unit not eligible for CoBen to a Bargaining Unit eligible for CoBen, including those employees who are currently serving the 24-month restriction, will be allowed to enroll or change to a Delta Dental plan.
In accordance with Internal Revenue Service (IRS) regulations which prohibit the deferral of income; under no circumstances will retroactivity into a prior plan year be allowed. In those instances where CalHR approves retroactivity it will only be approved for the current plan year.
DESIRED COBEN ELECTION
DESIRED COBEN ELECTION AND FLEXELECT ELECTION
DESIRED COBEN AND FLEXELECT ELECTION