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No More Waiting: Final Rules for Affordable Care Act Issued
Wednesday, April 30, 2014 6:40 AM

Since the passage of the Affordable Care Act (ACA) in 2010 and the U.S. Supreme Court decision in 2012 upholding the Act, employers have had to prepare for the new requirements by analyzing proposed rules. Final rules have now been issued, and it’s time for credit unions to move forward with their compliance efforts, advises Annette Bechtold, SVP of regulatory affairs with Digital Benefit Advisors (DBA), and Brad Pricer, senior manager, product management with CUNA Mutual Group.

While the fact the U.S. government has issued final rules sounds helpful, Bechtold said in the process of doing so, the government, in some cases, further muddied the waters by weaving in complicated transition rules. Credit unions need to be cognizant of these while working toward compliance.

“The ACA is still a changing law and will likely continue to be so,” Bechtold said. As an example, she cited the April 1, 2014 repeal of the annual deductible limit for small health plans for 2014. The limit was originally to be $2,000 for self-only coverage and $4,000 for family coverage.

Some of the more important details of the ACA’s final rules that credit unions need to be aware of include:

  • Definition of a full-time employee - Under the proposed rules, only one methodology was provided, which included measuring variable-hour and seasonal employees (which is not applicable to all employers). The final regulations provide two methods, one of which needs to be used by each employer.
  • Nondiscrimination rules – It’s okay to treat plan participants differently as long as the distinctions are based on a bona fide employment-based classification consistent with the employer’s usual business practice.  Examples of this would be:
    • Exempt vs. non-exempt
    • Different geographic locations
    • Collectively bargained vs. non-collectively bargained
    • Current vs. former employee

Pricer notes that Department of Labor audits of ACA compliance continue. While credit unions should ensure compliance with the ACA, they should make sure the foundation of those efforts stand on plans that meet the other requirements, such as ERISA which also provides requirements for health and welfare plans.

“If a credit union plan is audited, the DOL won’t just be looking at the credit union’s ACA compliance, but all compliance aspects of their health and welfare benefit plans,” Pricer said. “For example, does the credit union have proper Summary Plan Descriptions distributed to plan participants?  Are any required IRS Form 5500s being filed?”

These aren’t requirements of the ACA, but are potential areas that could trigger fines if the credit union is non-compliant, he added. Pricer said he still is unaware of any credit unions that have actually been audited for ACA compliance. However, Bechtold added DBA has seen employers audited in other industries.

“At this point, audits are likely the result of complaints from employees, not random.  However, after additional reporting requirements go into effect in 2016, random audits are likely to increase,” she said.

Pricer discussed Exchanges, also known as Marketplaces, by providing an overview of the Public Exchanges offered through the ACA and the potential offerings Private Exchanges could provide to credit unions.

If an appropriate private exchange is available in a credit union’s area, it could allow the credit union to change how it funds health insurance for employees. “Essentially the credit union could switch to a defined contribution approach from a traditional defined benefit approach to plan funding. This shift in funding strategies could help credit unions save money and better estimate the cost of providing health insurance year-over-year,” Pricer said.

He notes more credit unions are exploring moving to private exchanges due to the publicity gained from the recent enrollment in the Public Exchanges.

In 2013, CUNA Mutual Group transitioned its Employee Benefits business to DBA.