CUs must modernize benefits offerings just like they do with tech
Credit unions take great pains to ensure their technology, products and services are as up to date as possible, but there’s a growing consensus that a modernized benefits package could be just as important when it comes to attracting and retaining top talent.
A new report from ConnectYourCare, a Baltimore-based consumer-driven health care solutions provider, found CUs and other financial instutions need to improve how they inform employees about the benefits available to them, in part because health care costs continue to rise and benefits packages are becoming increasingly complex.
The report, titled the “Consumer-Driven Health Plan Enrollment & Usage Trends Survey,” asked approximately 250 employers how their workers feel about their benefits and how well they can access information about such benefits. The result? The survey revealed employee education and communications will “continue to require significant resources.”
ConnectYourCare also noted that, despite all efforts by third-party advisors, employers and others within the industry, one of the biggest barriers to enrollment in such programs as Health Savings Accounts is employees’ lack of awareness of their related financial tax benefits. Indeed, about half of employers (47 percent) said their staff did not enroll in HSAs, Flexible Spending Accounts or other tax-advantaged accounts because they don’t know about the accompanying tax benefits.
While the majority of credit unions are believed to offer employee benefits, not all U.S. workers receive them. According to the U.S. Bureau of Labor Statistics, retirement and medical care benefits were available to 70 percent of civilian workers as of March 2017, while 94 percent of unionized workers had access to employer-sponsored retirement and medical care benefits. For non-union workers, 66 percent had access to retirement benefits and 67 percent to medical care benefits.
According to Heather Barnes, SVP of U.S. sales at ConnectYourCare, credit unions have been increasing benefits options for employees in recent years. About 40 percent of ConnectYourCare’s 20,000 clients are in the financial services industry, noted Barnes.
“We are seeing three trends in this industry: the movement to full replacement HSA plan designs; accelerated HSA funding; and a move to maximizing tax-advantaged account savings offerings across the board,” she said.
Barnes added that credit unions have also been at the forefront of developing some rather novel benefit programs for their employees, including “lifestyle accounts,” such as commuter programs, gym memberships, adoption reimbursement and education reimbursement, among many others.
But credit unions shouldn’t start patting themselves on the back just yet. Barnes cautioned that credit unions — along with virtually all other industries — need to do better when it comes to informing and educating staff about the benefits available to them.
“Education is key to driving enrollment and engagement, and we partner with our clients to deliver innovative educational programs,” she added. “For credit unions specifically, interactive tools like savings calculators are particularly effective to motivate behavior.”
Even within the financial services industry, she indicated there is “always more room” to educate employees about the tax-savings options available.
“Educating employees year-round and making the savings real with tangible examples are two ways the best communicators are educating their workforce,” she said.
Barnes further observed that her firm’s research found financial services employees are “more willing” to invest in their health care spending. “For example, we’re seeing that the average amount employees contribute to their own HSAs is nearly $1,000 more per employee for the financial services industry versus our entire book of business,” she elaborated. “Additionally, these employees are more fiscally responsible: 99 percent pay back accelerated HSA funds versus 97 percent for our [whole] book of business.”
But Barnes believes credit unions should be striving for perfect 100 percent participation rates in their HSAs. “They should be moving toward a full replacement HSA plan design,” she stated. “This type of plan design offers significant cost savings.”
Benefits expansion underway
Generally speaking, across the entire U.S. corporate landscape, said Barnes, employers are expanding their benefits, but in a “strategic and measured” way. “Companies are expanding in the areas that give them the best returns: wellness programs that deliver health results, tax-advantaged accounts that provide FICA savings back to the employer, and lifestyle programs that boost employee morale and productivity,” she said.
One example of that is $568 million asset Vibrant CU in Moline, Ill., which recently added a 24-hour gym at its corporate center. “Healthy employees tend to be happier and more productive employees,” said Vibrant President and CEO Matt McCombs. “All employees have access and are welcome to work out before work, after work or during their lunch”
The benefits available to credit union employees across the country vary widely according to the institution’s size and the needs of the staff. Still, most advocates agree that educating their workers about their benefits is of paramount importance.
Pamela O’Conner, vice president of total rewards-human resources at the $17.2 billion BECU of Tukwila, Wash., said her credit union has focused on implementing a benefits strategy and “road map” over the past five years. This strategy has focused on: improving the efficiency of its plans; increasing administrative operational efficiency; adding differentiated benefits; driving “meaningful” wellness programs that support employees; and improving benefits that need a review and update.
Across the country at $2.9 billion-asset Coastal CU of Raleigh, N.C., VP of Human Capital Amy Gravitte said her institution recently changed its paid time off policy, which resulted in increased PTO for all new hires and many pay grades, depending on years of service. “We also introduced a Guaranteed Life Insurance offer, a 401(k) loan program and began offering paid time off for volunteer time,” she added.
How do credit unions gauge the popularity of their benefits packages?
Overall, Barnes of ConnectYourCare said credit unions need to make their benefits packages easier to understand and less confusing for their workers, and include various media to do so, including videos, pamphlets, brochures and internal communications.
For its part, BECU collects employee feedback on a “regular basis,” O’Conner said. “With health benefits, there are lots of metrics to indicate how well the plans are running, It’s very important to monitor them, and we look for ways to improve the health and efficiency of the plan. Our goal is to be better than trend with our plans and we have implemented a multi-faceted approach to achieve that.”
More education needed
But how are workers apprised of these myriad benefits?
O’Conner said BECU informs and educates its workers about the benefits the credit union offers through a “Benefits Communication Portal” and a “Total Reward Statements” page where workers can find the total value of their compensation and benefits package. They also do this by creating “engaging and fun” videos, as well as by posting information on its InfoPoint site and via emails, health fairs and other postings.
When employees begin the application process at Vibrant Credit Union, said McCombs, they are informed of some of the benefits. “During the orientation process … employees are made aware of the full array of benefits,” he said. “Educational videos around benefits have also been created.”
Coastal Credit Union conducts annual benefits enrollment training sessions, Gravitte said. The CU delivers an extensive benefits review during New Hire Orientation.