ALEXANDRIA, Va. — Federal credit unions can reimburse directors for disease management health insurance if the coverage is reasonable and limited as required under NCUA regulations, the agency stated in a recent legal opinion letter.
NCUA's implementing reg, Associate General Counsel Sheila Albin wrote in legal opinion letter 06-0932, states that the prohibition on compensation does not prohibit "reasonable health, accident and related types of personal insurance protection, supplied for officials at the expense of the credit union," but coverage "must cease immediately upon the insured person's leaving office, without providing residual benefits other than from pending claims."
She noted that employer-sponsored health plans with disease management programs are becoming more commonplace making it reasonable. The idea behind these programs is to improve the health of people with chronic conditions like diabetes or cancer.
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However, instead of providing insurance directly, federal credit unions can reimburse officials for health insurance costs. For compliance, the FCU must have a written policy regarding the extent of the coverage and how to monitor the application of its funds to the insurance premiums.
Albin recommended contacting your NCUA examiner or regional office to determine if a particular plan is permissible.
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