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COBRA Changes Impact Florida Community Associations

Economic Stimulus Package Changes COBRA and mini-COBRA Procedures and Rules. On February 17th, 2009, President Obama signed a $787 billion economic stimulus plan known as the American Recovery & Reinvestment Act of 2009.   Changes to both federal COBRA and state (“mini-COBRA) regulations may require action on the part of employers. The Act includes Federal funds to subsidize sixty-five (65%) percent of COBRA or state continuation (Mini-COBRA) premiums for up to nine months.  Eligibility is limited by income. Federal COBRA impacts any employer with twenty (20) or more employees.  Many community associations do not have this many employees and therefore are not concerned with the changes. However, in Florida, entities with less than twenty (20) employees are subject to “mini-COBRA” regulations.  Any employees “involuntarily separated” from employment between Sept. 1, 2008, and Dec. 31, 2009 qualify for the subsidy. Employees who lost their jobs between Sept. 1, 2008, and February 19th, 2009,  but failed to initially elect COBRA because it was unaffordable, have sixty (60) days to elect COBRA and receive the subsidy, however, they will have to pay the full premiums for the coverage period from the date of separation to the date of enactment of the law. If the employee elected to take COBRA on or after September 1, 2008, they will be eligible to receive the subsidy prospectively for up to the maximum nine-month period. Associations with employees are encouraged to confirm that their payroll vendors or COBRA administrators have systems in place to ensure compliance.  Consultation with legal counsel is also recommended.

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