ATLANTA — The Affordable Care Act (ACA) created a great deal of uncertainty among credit unions this year about the future of employee healthcare.
Yet amid the confusion Obamacare sent a clear message: Higher health insurance prices are coming - if they are not already here.
"Throughout the credit union community there had to be many HR execs saying, 'My gosh, here comes more cost,'" said Annette Bechtold, SVP of regulatory affairs and reform initiatives for Digital Insurance, a health benefits advisory firm, about CU reactions following the Obamacare rollout.
Bechtold surmised, however, that many credit unions have yet to feel the ACA's sting, since a number of health insurance carriers offered employers the option to renew their existing plan this year, ahead of their 2014 renewal date.
Bechtold said that bought credit unions a little more time before having to make health insurance choices under new ACA pricing for both public and private options.
Who May Fare Better
She pointed out, however, that employers with less than 50 full-time staff, and who have an older team, may fare better under Obamacare. The ACA is designed for younger, more healthy individuals to subsidize older policyholders. That also leaves small credit unions with young staff facing higher increases, Bechtold said.
The Obamacare rollout, as widely noted in the media, suffered major missteps - including HealthCare.gov at its October rollout failing to handle the onslaught of enrollees, with ACA mandating that all Americans have coverage by Jan. 1, 2014.
But Washington scrambled. President Obama extended the deadline for coverage enrollment by three months and focused more resources on the troubled website. Bechtold said the latest report from the White House is that the website is working much better and many more Americans are signing up for health insurance.
"Just in two days in early December, HealthCare.gov enrolled more people than it did in all of October," she said.
This year many credit unions and analysts told Credit Union Journal that human relations executives were doing their best to digest all the new healthcare rules and become accustomed with the concept of the new public and private health insurance exchanges - many of which appeared this year.
The exchanges were being evaluated by CUs not only as an option for coverage for their own staff, but also a revenue source. Several private exchanges appeared in 2013, such as Credit Union Exchange Blueprint in Birmingham, Ala.
The exchanges allow CUs to offer health insurance coverage to members through the exchange but under the credit union's brand. Late this year, the $150-million Aventa Credit Union in Colorado Springs, Colo., began offering a health insurance marketplace to its members. Partnering with Credit Union Exchange Blueprint, Aventa branded its offering the Aventa Insurance Marketplace.
At Credit Union Journal's Grow Show in Orlando, Fla., in June, which featured a session on health insurance exchanges, there was a great deal of discussion among executives about the possibility of exchanges becoming a revenue stream for CUs, but not much talk about whether CUs would cancel their employee coverage, sending staff to a public exchange and paying for the move by increasing employees' pay.
In November, Jim Fournier, compliance officer at the Salus Group, a health benefits advisory firm in Sterling Heights, Mich., said there is growing discussion among CU execs about dropping healthcare coverage and sending employees to health insurance exchanges.
"We are hearing credit unions talk about this option. But we have not had anyone tell us they have decided to make the move," said Fournier, who cautioned the decision makes it more difficult for the CU to hire and retain top talent. "Several CUs, we know, have discontinued their group retiree health coverage and have provided a payout to individuals to purchase their own coverage."
But Bechtold said the new regs may have had the toughest impact on some small CUs. The ACA rules had health insurers in sending cancellation notices in the fourth quarter to many individual and small group subscribers (those with less than 50 employees) across the U.S., stating their plans do not meet the standards under the new rules, and will end once plans renew in 2014.
Small CUs Scrambling
That sent a number of small credit unions scrambling to find affordable employee healthcare coverage, said Bechtold - including North Alabama Educators CU in Huntsville, Ala.
At the start of November, CEO Greg Olmsted told CU Journal, "I don't know what we're going to do," acknowledging the cancellation notice that his CU received arrived in October caught the credit union off guard. "We are looking at every possible option now before our renewal date Jan. 1."
A Higher Price Tag
But health insurance plans, especially for small groups, Olmstead said, have a price tag much higher than the $83 million credit union has become accustomed to paying. At the time he said the CU was assessing the new plans offered from his carrier. "The closet option our Blue Cross and Blue Shield provider put together, based on the new qualified plans, comes with a 42% increase in monthly premiums, which we can't pay."
Later that month Obama changed the rules, allowing those who like their current coverage to keep it.
However, Bechtold said that is an empty promise for some. She explained that an employer's ability to keep its current plan depends first on whether a state's health insurance rules allows that to happen, and also if the insurer will continue the coverage.
Bechtold said 2013 has been a year in which everyone - employers, state and federal government, health insurers - have been preparing for the rollout of the majority of the ACA rules next year.
"So 2013 was about building the infrastructure to make things happen in 2014. And we all learned a lesson," added Bechtold, pointing again to the consumer confusion and Obamacare website problems, "one year was not enough time."
