WASHINGTON (2/27/13)--Credit unions can prepare for moving full speed ahead on complying with the new health care reform mandates, including those going into effect later this year and beyond, a CUNA Mutual Group product executive told a breakout session audience at the Credit Union National Association's Governmental Affairs Conference.
The presidential election's outcome and the U.S. Supreme Court's June decision to uphold the Affordable Care Act (ACA) should signal a green light for employers--including credit unions--to do this, said Brad Pricer, senior manager, Employee Benefits Product Management.
"Requirements are already in place, and more are slated for 2013 and 2014, which may require action by health plans, including the distribution of Summary of Benefits and Coverage and Exchange Notice Requirements to employees," Pricer said. He told the group that the U.S. government also had taken a wait-and-see approach but is now moving ahead with a spate of proposed regulations and clarifications for employers to comply with related to the ACA
The Department of Labor has started auditing health care reform compliance, although to what extent is unclear. "I have yet to hear of a credit union that has actually been audited, but now is the time to rely on your broker or consultant to stay on top of the flurry of information coming from the government," Pricer added.
As employers, credit unions have the option to sponsor health plans for employees due to the ACA's individual mandate, but they will have to pay a penalty under "Play or Pay" provisions if they choose not to offer coverage. The penalty tax will apply to certain businesses that do not offer health insurance to their employees at certain levels of coverage and affordability, or do not offer it at all.
"As more details emerge on Play or Pay penalties and how they may be calculated, it's important credit unions understand what effect this may have on them if they don't offer certain levels of coverage deemed 'affordable' under healthcare reform," Pricer said.
Enough information exists that a credit union can estimate if its current plan puts it at risk of incurring Play or Pay penalties. Pricer urged all credit unions to use CUNA Mutual Group's free calculator on its website to assist them in this analysis. Use the link.
He also recommended attendees look for potential opportunities with health care reform, such as shifting to a defined contribution approach for funding a health plan. Such an approach is made easier when combined with offering coverage through a private health exchange. "This moves the risk of incurring high health care costs from employers to employees and is similar to the previous shift with retirement plans. You may find this enables you to better plan health care costs year over year."
Public exchanges also are playing catch-up following the elections. How each will operate, and the quality of the experience for those enrolling through them, is likely to vary state-to-state, he noted.
Credit unions looking to maintain an "employer of choice" strategy in attracting and retaining talent will likely not want to stop offering coverage to employees (leaving them to buy through the public exchanges) , he said. Surveys show most employers will not drop coverage.
Health care coverage could become a deciding factor for individuals in choosing their place of employment. If a credit union no longer provides health coverage, wages for employees likely will need increased, as providing health care is considered a part of employees' compensation.
The bottom line is a credit union's decision to offer health care coverage will likely be driven by affordability and whether it embraces the philosophy of being an employer of choice to recruit and retain the best available talent.
Pricer urged the audience to stay informed about ACA requirements for 2013 and how to best form an appropriate strategy by visiting CUNA Mutual's webpage on Health Care Reform for timelines, legislative briefs, model notices and forms. Use the link.