CASH OPTION (CoBen)

If you have qualifying group health or health and dental coverage through another source, such as your spouse, you may opt to receive cash in lieu of both your state-sponsored health and dental coverage or for your state-sponsored health coverage only. Qualifying group health coverage includes health coverage that provides minimum value as established by the federal Patient Protection Affordable Care Act (ACA) and is maintained by an employer or employee organization. All state California Public Employees’ Retirement System (CalPERS) health plans currently meet the law’s minimum value standards.

The ACA establishes a minimum value standard of benefits for a health plan. 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. Employees may refer to their plan’s Summary of Benefits and Coverage document to determine if their coverage meets the law’s minimum value standards.

Employees enrolled in individual coverage, such as TRICARE, Medicare, Medi-Cal, and Covered California, are not eligible to receive cash in lieu of other health coverage, even if the coverage provides minimum value.

Benefits of the Cash Option

These payments are considered taxable income and are as follows:

• $155 – if you decline both the state-sponsored health and dental plans
• $130 – if you decline only the state-sponsored health plan

Note: You will not receive any CoBen Cash if you decline dental coverage only.

CoBen cash payments are included with your regular paycheck and are subject to the same payroll taxes (federal, state, and Social Security) as your regular salary. However, CoBen Cash payments are not considered compensation for retirement purposes. This additional cash is reported on your W-2 statement in the same tax year you received the CoBen Cash payment. 

For more information on the program and eligibility please contact your department’s personnel office.