Offering Health Care Insurance Gives Credit Unions a Competitive Advantage Over Other Employers

By Beth Soltis
Senior Research Analyst
Credit Union National Association

As a whole in the United States, employer-provided health care insurance is on the decline. Many employers simply can’t afford the escalating costs of health care, which continue to increase well above the rate of inflation. Indeed, experts contend that the U.S. employer-based health care system is in jeopardy.

Credit unions, however, continue to offer this prized employee benefit. Overall, two-thirds of credit unions provide group health insurance to their employees, according to CUNA’s 2007 Credit Union Staff Benefits Report

Offering health care insurance coverage gives credit unions an advantage in attracting and retaining employees – no small feat in today’s knowledge economy. The fact is, the majority of American workers consider health coverage to be their most important benefit. About 75% of employees would rather receive employer health benefits than get paid more and purchase health insurance on their own and 83% would rather see their salary or retirement benefit reduced rather than health benefits if their employer needed to reduce total compensation, according to a recent survey by the National Business Group on Health (NBGH).

Not only do credit unions continue to offer health care insurance to their employees, but credit unions are actually more likely to offer group health insurance than in years past. The percentage of credit unions providing group health insurance to their employees is up from 58% in 2003 – and that figure had not changed significantly over the previous eight years.

Looking at specific types of group health insurance plans, PPOs continue to be the most common health insurance plan offered. Almost 65% of credit unions that provide health insurance offer PPO coverage, while 30% offer HMO coverage, 14% offer conventional indemnity plan coverage, and 9% of credit unions offer some other type of health care plan (Figure 2). The percentage of credit unions offering PPOs and other health care plans has increased since 2003, whereas fewer credit unions are offering HMOs.

To combat increasing health costs, employers are asking employees to shoulder some of the burden financially as well as turning to health management programs which assist employees in managing their own health and making healthier choices. Even if the employer-based system is saved, employees will undoubtedly be expected to be more active partners than in the past.

While health care insurance is a crucial component of the benefits package, certain benefits will be more important to certain employee segments. Knowing what benefits your employees value most will help your credit union strategically determine the right mix of benefits. With four generations in the workplace and an increasingly diverse workforce, customization and flexibility are key to creating a benefits package that meets the needs of employees.

The following reports are available for purchase. Click on any of the links below for more information or to purchase a report(s).

• 2007-2008 Credit Union Staff Benefits Survey
• 2006-2007 Credit Union Incentives Survey
• 2007-2008 CEO Total Compensation Survey

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