Credit unions on the cusp of 50 full-time or full-time equivalent employees wondering if they must comply with Obamacare in 2014 need to decide now if they will utilize a look-back period option, said an expert from a top industry auditor.

Whether or not a business exceeds the 50 FTE Obamacare threshold will be assessed on a monthly basis, said Anita Baker, managing partner of employee benefit plans at the Minneapolis-based firm CliftonLarsonAllen, which has 350 credit union clients. 

Non-exempt employees who work varied hours could cause a nightmare for human resources departments tasked with calculating FTEs each month, she said.

To provide a safe harbor that allows companies to lock in Obamacare compliance status, Baker said the program allows employers to apply a look-back method, which involves documenting FTE counts over a period of six to 12 months during 2013.

“Employers really need to determine now if they want to use a look back for 2013,” she said. “If you wait, the process will be a lot harder.”

Credit unions that wish to take advantage of the look-back provision aren't required to notify the federal insurance exchange or regulators, but Baker said auditors and regulators will check to ensure employers document the methodology used to determine FTE numbers.

“It's just like any other law, you'll have to document you've used a specific measurement period and if employees took your coverage or declined. It's just like any other process,” she said.

Although penalties for compliance exceptions are steep – $2,000 to $3,000 per employee depending upon the violation – Baker said they may not be as expensive as the cost to provide required insurance for employees, especially those who elect for family coverage.

“Employers are generally paying more than $3,000 per employee for health coverage, so they may want to look at if it makes more sense to pay the penalty,” she said.

Not-for-profit credit unions should also consider the fact that because they don't pay federal income taxes, they won't benefit from the ability to deduct premiums from their federal taxes, Baker said.

Additionally, she said, employers should consider the impact on higher earners should they decide to drop coverage altogether, because only low-wage earners will be eligible for subsidies at the government exchange.

“If they go from an employer's plan where they only pay 20% of the premium to paying 100% of the premium, in effect that's a significant pay cut,” she said.

A recent CUNA Mutual Group survey revealed that only 31% of credit unions are ready to comply with the Patient Protection and Affordable Care Act.