ATLANTA-Public health insurance exchanges, the cornerstone of the Affordable Care Act, debuted to a great deal of consumer interest last week, but little of that came from credit union executives.
An informal poll of health insurance experts and credit union CEOs found that it's wait-and-see for CUs now, due largely to skepticism toward the exchanges and CUs holding the line on providing employees with excellent healthcare benefits.
Sources also indicated that many of the public exchanges run by the federal government will not have complete website information available to allow groups and individuals to make final decisions until early November.
Annette Bechtold, SVP of regulatory affairs and reform initiatives for Digital Insurance, a health benefits advisory firm, said-for now-the new exchanges have simply piqued CU execs' interest.
"Yes, credit union executives will be curious about the pricing, which we have been told will be lower than what is offered through traditional plans today," Bechtold said. "I think a lot of CUs will look; they just won't end up buying."
But looking wasn't easy last week, as numerous state- and federal government-run health insurance marketplaces experienced glitches, delays and even crashes.
Cindy Atteberry, CEO of the $23 million Joplin Metro Credit Union, Joplin, Mo., told CU Journal last week she was aware of the technical issues. "I will be interested in how the rates compare to what we offer our employees," said Atteberry, who indicated her CU will likely, for now, keep its traditional employee coverage despite rising premiums.
Laida Garcia, CEO of the $400 million Tampa, Fla.-based Florida Central CU, said that after numerous conversations with the CU's health insurance broker, FCCU has decided not to use a health insurance exchange.
"We feel they are inferior to our plans," said Garcia. "Because health insurance premiums have gone up as a result of Obamacare, we opted to introduce an excellent HMO hybrid as the base plan and will also make available a richer plan staff can buy up and pay the premium differential between the two plans."
Bechtold said her experiences with credit union leaders during speaking engagements indicate most CUs are not turning to exchanges for two main reasons: They don't like having limited choices on public exchanges; and weaker healthcare coverage places CUs at a disadvantage when competing with other FIs for talent.
The important question regarding employee healthcare, according to Dan McGowan, EVP and CFO at Pioneer West Virginia FCU in Charleston, W.Va., is how long can CUs afford top-of-the-line packages. He said his CU has engaged in a great deal of discussion about how to best provide such benefits to staff.
"One of our board's strategic ideals is to be the employer of choice in our local financial services market," said McGowan. "Part of that is having an attractive group healthcare plan. We are going to continue providing something beyond the basics through a traditional group plan for as long as we can. But how long can we? We don't expect our employees to see much change during 2014. But beyond that, it's anyone's guess."
Stuart Perlitsh, CEO of the $325 million Glendale Area Schools FCU in Glendale, Calif., said his credit union also sees competitive value in offering a "robust" employee healthcare plan. "GASFCU pays 100% of employees' healthcare premium and co-pay. We have offered free healthcare to employees before it became Obama fashionable."
Tommy Cobb, CEO of Tuscaloosa CU, Tuscaloosa, Ala., said he regrettably sees health insurance exchanges in the near future for his credit union. Noting he expects his CU's group healthcare coverage to skyrocket in the next year, Cobb has been researching private exchange options.
"We currently offer the best plan Blue Cross offers and it is 100% employer paid. I went to a [private] exchange and ran through an insurance price using Blue Cross as a provider and the exchange was 40% cheaper," said Cobb. "The plan is a notch or so below ours, but that is strong."
Noting that he was just running numbers and that his credit union has yet to decide if it will move to an exchange, Cobb added, "If we dropped healthcare coverage and increased employee pay by the premium amount staff could purchase insurance, pocket the difference and still get up to 100% reimbursement from the government. The whole Affordable Care Act makes about as much sense to me as a pile of coat hangers. But looking through the narrow lens of a small business employer, I can see no other option than moving to an exchange."
But some health insurance experts suggest that many more credit union CEOs will eventually adopt Cobb's perspective as healthcare exchanges become integrated into the U.S. healthcare marketplace.
"It's a mindset change," said Corinne Sherman, SVP of fee services at the Pennsylvania CU Association in Harrisburg. The league has worked with credit unions in this state for more than 20 years to help lower healthcare premiums, providing a group-buying option.
"Consumers spend more time figuring out the features of their flat screen TV than the workings of their healthcare coverage," noted Sherman. "That is going to change. This is an evolution. Consumers are going to have to take a more active stake in their healthcare coverage."
Josh Hilgers, president of Health Partners America, an employee benefits administrator in Birmingham, Ala., said there will be a shift in consumers' mindset in the future.
"We think the writing is on the wall for the employer-sponsored health insurance model," Hilgers said. "It will really be interesting when employees come to their bosses and say, 'Please drop our health insurance coverage so we can go to an exchange.' "
Digital Insurance's Bechtold said most CUs are skeptical about the public exchanges, and also don't want to be the first to use them. "There is still a lot that is unknown and unproven about the public exchanges, and no one really knows how well costs will stay in line."
