As the nation awaits the U.S. Supreme Court’s decision regarding the Patient Protection and Affordable Care Act, the implications of health care reform continue to be murky for employers.
According to a recent health care reform survey by Zywave, a software solutions provider, employers’ biggest health care reform provision concerns are new reporting, disclosure and notification requirements (57%), additional W-2 reporting requirements (49%), and the requirement to automatically enroll new employees in a health plan (40%).
While most employers surveyed plan to continue offering health benefit coverage for their employees, 76% have already seen an increase in their organizations health benefit costs or expect to see an increase as a result of health care reform provisions. In addition, 63% plan to pass the increases on to employees.
The survey results are in keeping with the most frequently asked questions fielded by Brad Pricer, human resources process leader at CUNA Mutual Group, who has been helping credit unions and leagues navigate health care reform.
Topping credit union concerns is the requirement that kicks off in 2014, which requires employers with more than 50 employees to offer minimal essential health coverage to employees or be subject to a penalty.
Pricer said, assuming it survives Supreme Court review, credit unions will not still need to sponsor health plans for employees due to the individual mandate, but they will have to pay a penalty under play or pay provisions. The penalty tax will apply to certain businesses that do not offer health insurance to their employees at certain levels of coverage and affordability or do not offer it at all. He added that employers will likely follow their peers when deciding whether to offer coverage after exchanges are established by Jan. 1, 2014. Exchanges are meant to facilitate the purchase of health plans, making the process easier and more efficient.
According to Pricer, that health care insurance exchanges will continue to move forward, regardless of the Supreme Court’s decision, which is expected in June, and credit unions should make the most of the opportunity.
“The landscape is definitely changing, but credit unions will be able to take advantage of a post-health care reform environment while controlling costs and maintaining an employer of choice strategy if they so choose,” Pricer said during a presentation at the 2012 CUNA Human Resources/Training and Development Council Conference. “Whether your credit union should continue to provide coverage comes down to whether the businesses you are competing with to attract and retain employees decide to offer coverage or not. If they do, and your credit union discontinues its plan, it will be more difficult to attract and retain talent.”
He added it may be more a matter of credit unions shifting their focus to look at new ways of purchasing health coverage through state-sponsored or private exchanges.
According to Pricer, purchasing through exchanges and employing a defined-contribution approach to funding has been gaining momentum.
“A shift to a defined contribution approach moves the risk of incurring high health care costs from employers to employees and is similar to the previous shift with retirement plans,” said Pricer. “Instead of providing a set of pre-defined health insurance benefits through one or two employer sponsored plans, employers will provide a fixed amount of funding. Employees will use that amount in an employer-sponsored exchange to help pay for the level of coverage he or she deems appropriate.”
As for what credit unions should be doing during this waiting period, Pricer advised credit unions not to ignore health care reform compliance requirements.
“In my opinion, it’s highly unlikely that all of health care reform will be struck down even if the individual mandate falls,” said Pricer.