Do Your Benefits Measure Up?

As insurance costs skyrocket and the need to balance work and family life becomes more important, the value of benefits as a tool to attract and retain employees continues to increase. According to surveys conducted by CUNA’s market research department, employees rank benefits higher than organizational policies, supervisory practices, and communication in terms of contributing to overall job satisfaction.

Data collected in CUNA’s 2001 Staff Benefits Survey indicates that vacation, retirement and health insurance benefits are the most offered benefits among credit unions. As might be expected, the incidence of offering nearly all benefits increases as asset size increases.

In the health insurance arena, credit unions, like most employers, have shifted away from offering traditional indemnity plans toward Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). The percentage of credit unions offering indemnity plans has decreased 24 percentage points since 1998, while the percentages offering PPOs and/or HMOs has increased 24 and 14 percentage points, respectively.

As expected, premiums have increased since 1997 for all types of health plans. Somewhat surprisingly, the average premium paid by credit unions for indemnity plans has shown the smallest increase of all plan types. The small increase is likely due to the movement away from indemnity toward managed care plans. Credit unions with lower cost indemnity plans are probably less likely to have changed from an indemnity to a PPO or an HMO causing the average premium to remain more stable even though individual premiums likely increased.

Regarding retirement/savings plans, the availability of 401(k)s to credit union employees has increased dramatically since 1998 from 44% of credit unions offering to 71%. In addition, credit unions are offering employees flexibility in the form of wide ranging investment choices and the ability to change investments frequently. Seven in ten credit unions that provide a choice of investments allow changes daily or on an unlimited basis.

Quick Facts:

• Seventy percent of U.S. employers plan to increase employee health care premiums over the next three years.(Source: Watson Wyatt Worldwide, Sixth Annual Purchasing Value in Health Care Survey.)
• Forty-four percent of recruiters say it has taken longer to fill open positions over the last six months; 43% say their recruitment budgets were cut for 2001. (Source: HR Magazine, April 2001.)

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