Valiant attempts have been made in recent months to bend the cost curve while still offering robust benefits in a tight labor market across the credit-union (CU) community, which is known for offering generous benefit packages.
Case in point: a new offering from CU Benefits Alliance LLC. The Salem, Ore.-based employee benefits consultant and brokerage founded in 2010 has secured affinity pricing for CUs with 5 to 500 employees (about 95% of the market) in 38 states.
“Credit unions are competing with other credit unions, banks and financial institutions for talent,” says John Harris, CEO of CU Benefits Alliance LLC. “So they typically have had to offer richer benefits than just your average employer.”
Another factor is demographics. The average age of a CU employee is about 38 or 39 and more than 60% are female. As employers, he notes that CUs represent an average or better-than-average insurance risk. “We’ve seen that when we evaluate our loss ratios on stop-loss insurance,” he adds.
The new offering, called Interest Benefits, includes group medical, dental and vision plans whose premium savings average 22%. With 16 different benefit levels to cover a range of needs, it also features integrated wellness incentives and cash rewards and up to a $500 deductible credit available to all wellness participants.
The mix includes four major product families, each of which features multiple deductible choices. CU size ultimately will dictate plan design. For example, groups of 10 or fewer employees may offer one or two options that start off with an 80/20 type PPO program.
Those with 26 or more may prefer four options that include a generous coinsurance plan with 100% coverage after the deductible is met, higher deductible with variable coinsurance or high-deductible health plan that’s integrated with a health reimbursement arrangement or health savings account.
Other noteworthy components include free telemedicine, lab services and diabetic testing supplies, as well as prescription drug savings, outpatient lab services covered up to 100%, and preferred pricing for dental and vision coverages. All of the fully funded insurance plans meet guidelines under the Affordable Care Act and qualify as credible coverage.
About 75 to 100 groups are expected to offer the package to their employees by yearend. Cost savings for CU customers are projected to be in the 15% to 20% range on average compared with going directly to a large carrier.
The aim is to help CUs buy their benefits in bulk and mirror large employer coverage, Harris explains. Following an initial focus on middle-market CUs, Harris’ firm decided to extend its reach to accommodate the roughly 70% of CUs with fewer than 50 lives.
CU Benefits, a Credit Union Service Organization (CUSO), also partnered with Cigna five years ago on a self-funding solution for CUs with 51 or more employees in most states. Each CU was able to build its own customized plan design featuring discounts usually offered to larger employer groups.
The program, which served more than 1,500 credit union employees and their family members, also included health coaching, biometric screenings, health assessments and lifestyle management. Harris calls this arrangement “a great initial stepping stone for a credit union coming out of a fully-insured program. We still use that model, and it works well.”
CUs expand their benefit efforts
While Interest Benefits is considered the only national program of its kind that exclusively serves the CU community, there are other efforts with similar objectives in mind for mid-market CUs. For example, InterLutions CUSO in Muskego, Wis., teamed up in February with Volunteer Corporate Credit Union (known as VolCorp) from Nashville, Tenn., on a collaborative initiative that pooled risk.
Described as a “revolutionary healthcare alternative,” the I-Care program sought to reduce costs while also allowing CU members with 50 or more participating employees to choose enhanced benefits from multiple networks.
The partnership cited the use of data analytics, risk-management strategies and consultative HR experts for helping CUs offer a more competitive benefits package. Since 2015, I-Care has served nearly 4,000 people nationwide and offers HR departments healthcare support services that include forums, conferences, workshops and one-on-one consulting. VolCorp is a not-for-profit financial cooperative that serves credit unions.
“Our current participants are experiencing healthcare cost efficiencies they couldn’t achieve previously,” according to Jesse Kohl, president of InterLutions. “Those cost reductions and efficiencies have allowed HR departments to offer better benefit packages at a lower cost to their employees.”
The VolCorp partnership also is designed to help CUs attract and retain top talent, he adds.
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