ANAHEIM, Calif.-The soon-to-be implemented Affordable Care Act, better known as ObamaCare, has credit unions scrambling to deal with its blizzard of requirements.
Although the healthcare reform law was signed in March 2010, many credit unions have delayed preparations, according to Brad Pricer, senior manager, employee benefits for CUNA Mutual Group. Perhaps that's one reason a full house packed a session on the issue during the CUNA HR Council's meeting here.
Pricer said many businesses had waited to act until after the elections of 2012, with Republican nominee Mitt Romney vowing to overturn Obamacare if elected. But the president's re-election, plus a recent Supreme Court ruling, means several ACA requirements are in place in 2013, with many more coming in 2014, he said.
"If credit unions have not been preparing, it is time to act," said Pricer. "There are ACA changes already in effect that will remain in effect, and more provisions will continue to be implemented."
Only 31% of CUs queried by CUNA's 2012-2013 Credit Union Staff Survey for Human Resources Planning study said they are fully prepared for compliance, Pricer said. The Department of Labor is beginning to audit ACA compliance, although Pricer has yet to hear of a credit union being audited.
'Employees Are Waiting'
Annette Bechtold, SVP of regulatory affairs and reform initiatives with Digital Benefit Advisors, said anything HR professionals at credit unions can do to prepare and have documentation ready will help going forward.
"The goal was about access to affordable healthcare, but instead many people are worried," Bechtold said. "For starters, credit unions need to figure out what they have to do, because employees are waiting for information."
Uncertainty is a big issue, but what is known is the law will apply to employers of all sizes, and starting Jan. 1, 2014, the maximum waiting period to enroll a new employee on a health plan is 90 calendar days.
"Wellness incentives are being expanded, more reporting is required and employers will have to substantiate individual offerings," Bechtold said. "For non-grandfathered plans, there will be new nondiscrimination rules. If a plan favors the highly compensated, the difference is taxable to the highly compensated."
The employer mandate "has everybody worried," she said noting there are different rules based on employer size. If a company has 50 or more employees, it must offer coverage to full-time employees and their dependents. The plan has to have a minimum value, and be "affordable," Bechtold noted.
The concept of an "applicable large employer" likewise is causing consternation, Bechtold said. All employees, including seasonal, are counted to determine the employer's status, with 50 being the cut-off point.
What is 'Affordable?'
"Watch out for multiple businesses owned by one common owner," she warned. "If employees add up to 50, that business becomes a 'large employer.'"
Employers may be assessed fees for any month they fail to offer minimum essential coverage to full-time employees and their dependents, Bechtold advised. Employers also can be fined if employee contribution is deemed "unaffordable." The problem: no one knows exactly what will be considered "unaffordable." Bechtold said if the employee-only contribution for the plan exceeds 9.5% of that person's W2 Box 1 wages, it can be deemed "unaffordable."
"The government is working on what is rolled out when to avoid confusing people, which is a good thing," she said. "No assessments will be made in 2014 if an employer has a fiscal plan as of Dec. 27, 2012 and an employee is offered affordable, minimum value coverage and satisfies two additional tests. This transition relief will allow employers with fiscal plan years beginning in 2013 to update their plan documents."
Play or Pay?
Pricer said there are potential opportunities for credit unions to ease the transition and continue to be able to offer health insurance to their employees, including public and private exchanges and a number of funding mechanisms
"If credit unions eliminate health insurance, they will have to consider what to replace it with as an incentive," he said (see related story).
One big question: Will all employees obtain health insurance coverage on their own? Pricer said the concept of "play or pay" refers to a decision all employers will have to make regarding the cost of premiums versus the fine they will have to pay if the do not offer insurance plans.
"Numerous play or pay calculators are available, but credit unions must look beyond the penalty to the potential impact on productivity," he said. "So many details go into this choice."
Pricer said CUs may visit www.cunamutual.com/HealthCareReform for timelines, legislative briefs, model notices and forms.
