Obamacare Audits Loom and Most Credit Unions Not Prepared: CUNA Mutual
Only 31% of credit unions are ready to comply with the 2013 and 2014 requirements of the Patient Protection and Affordable Care Act of 2010, according to a survey by CUNA Mutual Group.
The survey also found that another 14% of CUs are prepared for 2013 ACA (otherwise known as Obamacare) requirements, said Brad Pricer, senior manager for employee benefits product management for CUNA Mutual in Madison, Wis.
However, 26% of CUs surveyed indicated either they were not prepared, were not planning to start preparations until after 2012 or have a timeline for beginning preparations to comply with ACA.
Pricer, who spoke at the CUNA Human Resources and Training and Development Council Conference on Tuesday in Anaheim, Calif., encouraged credit unions to prepare to comply with ACA requirements because the U.S. Department of Labor has begun to audit businesses for ACA compliance.
“Credit unions should be working with their broker or consultant to stay on top of required mandates,” Pricer said.
Pricer was joined by Annette Bechtold, senior vice president of regulatory affairs and reform initiatives with Digital Benefit Advisors in Atlanta, who reviewed key requirements credit unions need to comply with in 2013 and 2014:
- Ensuring compliance with ACA’s non-discrimination rules regarding favoring highly compensated employees in benefits offered,
- Understanding whether the health coverage offered to employees is sufficient to avoid penalties,
- Ensuring health plans contain all mandated plan requirements, and,
- Meeting reporting requirements.
“It’s important credit unions understand what effect ‘play or pay’ penalties have on them if they don’t offer certain levels of coverage deemed affordable under health care reform,” Bechtold said.
The pay or play penalties refer to ACA’s requirement that all employers determine whether their health care plan is affordable and provides minimum coverage. Credit unions that don’t meet those two requirements would be required to pay a penalty tax of up to $2,000 per employee come Jan. 1, 2014.
The CUNA Mutual Group website features a health care reform “pay or play” calculator that can help determine if the insurance is affordable and offers adequate coverage.
Pricer said it is his opinion that most credit unions will continue offering health care coverage to employees even after the ACA is fully implemented.
“How they offer that coverage will likely change,” he said. “They might choose to fund it through a defined contribution approach or purchase coverage through public or private exchanges.”
Pricer also said health care reform offers credit unions opportunities as to how they potentially fund their health plan offerings. Credit unions may find this enables them to better plan health care costs year over year, while remaining an employer of choice in the eyes of employees.
“Ultimately, the decision to offer health care coverage will be driven by affordability and whether it embraces the philosophy of being an employer of choice to recruit and retain the best available talent,” he said.