CEOs Urged To Get Up To Speed On Health Care Reform's Implications

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SAN ANTONIO-The potential impact of health care reform on employers is beginning to take shape, and credit unions need to educate themselves on what it will mean to their own future employee benefits.

That's the recommendation from Brad Pricer of CUNA Mutual Group, who told CUNA's America's Credit Union Conference that health care insurance exchanges and "Play or Pay" penalties will likely have the most influence on whether or not credit unions offer health care benefits to employees and, if so, to what degree.

By Jan. 1, 2014, each state must establish an "American Health Benefit Exchange," noted Pricer, senior manager of Employee Benefits Product Management. These will provide a platform for businesses and individuals to purchase qualified health plans (QHPs) and provide for a Small Business Health Options Program (SHOP) Exchange to assist small employers in enrolling their employees in QHPs in the small group market, he explained.

"With the assistance of the Department of Health and Human Services, each state will develop its own exchange within certain parameters mandated by the federal government. How those are built within each state will determine what realistic insurance options are available to employers through the private market or through the exchange," Pricer said.

Also starting in 2014 will be implementation of the Exchange-Related Employer Penalty Tax-the so-called, "Play or Pay" tax. Certain large employers may be subject to penalty taxes if they do not offer a health plan to employees or if the plan doesn't offer a certain level of coverage. Specifically, penalty taxes could apply for:

• Failing to offer health care coverage for all full-time employees.

• Offering minimum essential coverage that is unaffordable.

• Offering minimum essential coverage under which the plan's share of the total allowed cost of benefits is less than 60%.

"Credit unions will need to make a decision," Pricer said. "Is it better to offer a health insurance plan to employees at a certain price, or not offer coverage and pay the federal Play or Pay penalty taxes on an ongoing basis?"

The answer will be driven by affordability and whether a credit union embraces the philosophy of being an "employer of choice" to recruit and retain the best available talent. "We don't have all the financial information yet, but understanding your options will help you make intelligent decisions when more is known."

Citing a McKinsey & Company study, Pricer told the audience at ACUC that it's estimated between 7% to 30% of businesses may opt to drop health care coverage for their employees.

Legal Challenges

Pricer also provided attendees with an update on ongoing judicial challenges to the Health Care Reform Law. Twenty-six states have challenged the constitutionality of the health care law, with the most notable case being "Bondi vs. HHS" in Florida.

The judge in this case declared that the constitutionality of the individual health insurance mandate is so intertwined with all other aspects of health care reform that the entire law is unconstitutional. The case appears to be headed to the U.S. Supreme Court, he said.

In the meantime, Pricer reminded credit unions of a number of key provisions of the law slated to go into effect in 2011 that are important, even if some of them have no direct impact on credit unions.

Key Provisions

• Availability of consumer rebates for excessive medical loss ratios.

• Employers may optionally report health coverage costs on form W-2.

• Employees need a prescription to be reimbursed for over-the-counter medications/supplies run through their health FSAs, HRAs, HSAs and Archer MSAs.

• Updated employee notice requirements.

• Grants for wellness programs are established

Pricer encouraged attendees to go to www.cunamutual.com/HealthCareReform for details.

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