Pub. 2 2013 Issue 6

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 6 I t has been nearly three and one half years since the Affordable Care Act was signed into law. The 2,700 page law has been accompanied by over 20,000 pages of regulations and there are still many questions surrounding implemen- tation. We do know that the parts of the law that have already been implemented include extending coverage to dependent children up to age 26, removing all annual and lifetime caps on benefits, the addition of enhanced wellness benefits and the elimination of pre-existing con - dition exclusions on children. Many of the major provisions of the law are scheduled to begin in 2014, however, at the time this article was written the employer mandate had been delayed to 2015. Beginning in 2014 there will be a fee of $5.25 per month for each person covered that will be assessed to all medical plans. This fee will be used to supplement the individual market which will provide cov- erage to anyone regardless of health with community rating that does not charge premium based on health risks. An additional insurer tax of 2.1% of premium will be assessed to fully insured medical plans to help fund premium subsidies that will be given to individuals buying coverage through the exchanges. These two fees will add approxi- mately 4% to our premium. There are provisions in the law which will force groups of under 50 employees to purchase their group coverage through a part of the insurance exchange known as the SHOP. These groups will have access to plans that have significant differences from what they are accustomed to and the rates will be based on community rating which does not reflect claim experience but only age, regional location and tobacco use. The KBA medical plan has taken steps that allow it to be a “bona-fide” association plan. This allows all of the banks in the plan, regardless of size, to be treated as one large employer for premium rating purposes. We believe that over time the premiums that are based on our own experience will be more favorable than the premium rates available through the community rated SHOP market. This year legislation was passed and signed into law by the Governor that would allow our med- ical plan to become self-funded. This allows a second avenue to keep the KBA medical plan together, if needed, and would also exempt us from the 2.1% insurer tax. We will continue to monitor the implementation of this complex law and do everything we can to position our plan so that it will continue to be a benefit to our banks. E very five years the KBA under- goes a review of the by-laws that govern the Association. The By-laws Taskforce met on January 10 and agreed upon a number of minor “housekeeping” changes they feel should be made. After those changes were discussed and agreed upon the topic of the current size of the Board was brought up and discussed thoroughly. A couple of key questions came up during the discussion: • Is the KBA Board too large to be efficient and truly effective? • If we were starting from scratch, how large would we design the Board to be? • And how would we structure it? Is geography the best way to determine bank representation? During the discussion some of the key topics included: • The feeling that a 3 year term is important in order to gain competency during the Board member’s term. • A certain amount of “historical” representation should be maintained. • Banks should continue to feel like they were adequately represented. The Taskforce also reviewed the Board make up of several other state bankers associations. In light of these discussion points, the Taskforce decided that they felt like the Board was too large for maximum effectiveness. They thought that 12 Board members was likely the best number of Board members. However, in order to address the other concerns regarding bank representation and historical representation, it was determined that the number of Board members would need to be larger than 12. They also determined that geography was still the best way to deter- mine bank representation. The proposal from the Taskforce is that we reduce the number of KBA regions from 6 to 3 thereby reducing the size of the Board from 29 to 20. When the KBA started the “Board of Directors” structure we have now, the number of banks per region was about 105. This reduction in the number of regions maintains that number of banks per KBA region. This allows the KBA Board to function better and more effi - ciently while maintaining the historic representation of Board member to bank. KBA By-Laws Review By Chuck Stones The Affordable Care Act By Ed Griffith