Where Benefits Lie In HSAs For Members-And Their CUs
As company-provided health care plans continue to raise premiums and provide less coverage, it is imperative credit unions offer members alternative ways to manage health-care costs, a panel of experts told attendees at CUNA Mutual's Discovery Conference.
Health Savings Accounts (HSAs), which were signed into law December 2003, are emerging as the preferred option because they help individuals manage current health-related expenses, while also building for future medical needs, said Lon Sprecher, CUNA Mutual senior vice president, employee benefits products.
"HSAs operate much like IRAs in establishing a savings account, and while the dollars can only be used for qualified medical expenses, it is pre-tax money that helps a member pay for services not covered by their current health plan," said Sprecher. "It is also a key way that businesses, including credit unions, can help control health care costs."
While HSAs provide credit union members a valuable opportunity for health-care coverage, credit unions also benefit. CoVantage Credit Union, Antigo, Wis., $529 million in assets, saw the advantage of HSAs early on and began offering them to members and staff in January 2006. The credit union program has no fees and an above-average interest rate, which Paul Grinde, CoVantage executive vice president, said is consistent with the credit union's philosophy.
"Health Savings Accounts provide significant business opportunities for credit unions as well as the opportunity to reduce health insurance costs for a credit union," said Grinde.
Beacon Credit Union, Wabash, Ind., $551 million in assets, offered HSAs in October 2005, and conducted research to make sure it offered the best pricing in the market. Dan Schoenherr, executive vice president of Solidarity Community Credit Union and formerly of Beacon CU, said all branch managers and loan officers were trained, and an important move was enlisting the competition.
The Critical Factor
"Establishing relationships with insurance agencies in the market may be a critical factor in the success of many HSA programs," said Schoenherr. Beacon CU contacted all independent insurance agencies in the area and developed relationships with 10 of them.
One of the first data processors to get in on the HSA movement was Fiserv. The Brookfield, Wis.-based company realized the growth potential and that not all credit unions would have the technology or the staffing to roll out a program.
"By integrating with our core system we are able to provide HSA-management from member enrollment through claims review," said Joe Barry, president of the Fiserv Credit Union Group Eastern Region. "We felt time-to-market was important for HSA technology because of the potential to help credit unions attract new deposits and strengthen and expand member relationships."