Providing Health Care Benefits Gives Credit Unions a Competitive Edge in Job Market

By Beth Soltis
Senior Research Analyst
Credit Union National Association

Skyrocketing health care premiums are a concern to all employers and credit unions are no exception. Yet, despite the soaring costs of health care, credit unions have not jumped the gun on reducing the health care benefits they provide to their employees. This provides credit unions with a definite competitive edge in terms of recruiting and retaining employees amid the deluge of health care and other benefits cuts nationwide.

According to E-Scan’s 2003-2004 Credit Union Staff Benefits Survey, about 60% of credit unions overall provide group health insurance to their employees and this figure has remained fairly stable over the last eight years. As would be expected, the driving factor in whether or not a credit union provides health care insurance is the number of full-time employees. In fact, nearly all credit unions that employ 10 or more full-time workers offer health insurance to their employees.

Double-digit premium increases for health care has become the norm. In order to deal with the increasing costs of health care benefits, employers across the nation are shifting a greater portion of costs to employees through increased participant premium contributions, deductibles, and co-payments, along with tiered co-payments for prescription drug plans.

When asked whether they made changes to their health care plan for 2003, 44% of credit unions said they made at least one change. The most common changes were increased co-pays, increased deductibles, and increased contributions to annual premiums, reflecting the national trend. However, fewer credit unions made changes to their 2003 health care plans than did employers nationwide.

On the other side of the coin, though it’s imperative that credit unions add or continue to offer health care insurance, credit unions will need to address the escalating costs of health care benefits before these costs begin to drain the bottom line. There is room for credit unions to share the burden of ever-increasing premiums with employees but still offer a competitive health care plan. Credit unions should consider adding or increasing employee premium contributions and co-payments along with offering flexible spending accounts that allow employees to pay for medical expenses with pre-tax dollars.

Nearly 50 types of employee benefits are covered in E-Scan’s 2003-2004 Credit Union Staff Benefits Survey. This detailed report provides a comprehensive look at the benefits credit unions provide to their employees as well as industry trends. It also gives credit unions peer comparisons according to asset size and number of full-time employees along with comparisons to employers nationwide for many of the benefits studied. In addition to health care, employee benefits topics that are studied include:

• Retirement and savings plans
• Group life insurance
• Disability insurance
• Vacation and general leave
• Ancillary benefits
• Benefits administration and outsourcing
• Part-time staff

A critical component of the compensation package, employee benefits not only draw qualified job applicants but increase employee satisfaction and minimize turnover. As the economy improves and job turnover rates subsequently increase, credit unions with competitive employee health care and benefits packages place themselves in the best position to both recruit and retain high quality employees.

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