Consultant: Full Speed on Reform Compliance
Despite the uncertainty and legal challenges over the Patient Protection and Affordable Care Act, credit unions need to stay the course and proceed with changes required by the law, said Brad Pricer, senior manager of employee benefits product management at CUNA Mutual, during the Texas Credit Union League’s annual meeting.
Passed a little over a year ago, the health care reform debate and legal challenges have left many employers unsure how to proceed with mandated changes. Credit unions aren’t alone with their doubts. A recent Deloitte survey found that managing health care costs continues to be the top priority for employers, and respondents indicated that compliance with the law has made it more challenging.
"Most employers have no current plans to significantly alter their health care programs. This may change as elements of the reform legislation take shape, especially in the design, pricing, efficiency and acceptability of the new state health exchanges. Employers may have new choices," said Steven Kraus, a principal at Deloitte Consulting LLP.
Consistent with concerns related to total health care dollars spent, when asked to choose their organization’s primary focus in addressing health care reform over the next three years, 63% of respondents selected "we will focus mostly on controlling our total health care costs." At the same time, only 9% selected "we will focus mostly on ensuring we comply with minimum mandated standards."
Not acting, Pricer said, would be a mistake.
"There are approximately 25 lawsuits filed by numerous states challenging the constitutionality of various provisions of the health care reform laws creating much political discussion and an uncertain path for business owners and employees," Pricer said. "For example, a recent federal court decision in Florida found the health care reform law to be unconstitutional. Yet, the decision in Florida clearly states that the health care reform laws are still in effect. It is important to understand that this decision is not settled as appeals are almost certain to take place."
Encouraging a full-speed-ahead approach, Pricer highlighted some of the key provisions of the law that are slated to go into effect in 2011:
• Consumer rebates for excessive medical loss ratios are available.
• Employers may optionally report health coverage costs on form W-2.
• "Qualified Medical Expenses" now conform to the definition used for the itemized tax deduction.
• Employees need a prescription to be reimbursed for over-the-counter medications and supplies run through their health FSAs, HRAs, HSAs and Archer MSAs.
• A simple cafeteria plan is created to provide small businesses an easier way to sponsor a cafeteria plan.
• Medicare Part D discounts are instituted.
• Grants for wellness programs are established.
Pricer added that while it may seem overwhelming for HR departments, there are resources available to help, such as online tools– timelines, legislative briefs, model notices and forms are available at www.cunamutual.com.
"One way to think about the employer implications of health reform is to think in terms of minimum standards. Beginning in 2014, employer plans will have to be designed with respect to eligibility and coverage rules, affordability and actuarial equivalencies, minimum essential benefits and a host of other thresholds. It’s a compliance imperative, but it may also serve as a stimulus for innovation," said Kraus.
The Deloitte survey also found that topping the list to manage rising health care costs once again in 2011 was increasing employee cost-sharing for active employee plans (62%). A close second at 59% was expanding wellness programs to help manage costs. The survey revealed an increase in plans to encourage more active employee participation in wellness and disease management programs in 2011.
In addition, 13% of respondents will consider replacing all current health plans with a consumer-driven plan and 14% will consider offering such a plan as an option.