Obamacare: Costs, Concerns Among Credit Unions
- The Patient Protection and Affordable Care Act is the law of the land, but it’s still uncertain how health care reform will affect credit unions.
- HR leaders and experts are certain, however, that health care insurance premiums will keep increasing because of new mandates, fees and taxes.
- Private health care exchanges, defined contribution plans, high-deductible options and workplace wellness program can help better manage health insurance.
It’s clear that the Patient Protection and Affordable Care Act, otherwise known as Obamacare, is the law of the land. But it’s not so clear yet how the new law will impact credit unions over the next two years when the bulk of the health reform laws go into effect.
However, the Obama administration contends the health care reform law will control escalating costs and eventually reduce premiums by $2,000 per family by 2019 for all businesses.
In the meantime, health care insurance costs continue to climb. Annual premiums for employer-sponsored family health coverage reached $15,745 in 2012, up 4% from 2011, reported the Kaiser Family Foundation. Moreover, employees are paying more than $4,300 toward the cost of their coverage. Since 2002, premiums have increased by 97%, outpacing the growth of wages and inflation.
“The defined contribution approach allows employers to give employees a set amount of funds and allow them to pick out a plan on a private exchange that best suits their needs,” explained Pricer. “Through a defined contribution approach, the amount the employer gives to each employee isn’t necessarily tied to how any one individual plan performs. This allows credit unions year over year to anticipate what their health care will cost them.” Another advantage is that private health care exchanges can reduce administrative burdens on companies.
High-deductible health insurance plans and workplace wellness programs are additional ways employers are controlling health care costs.