Why 1 CU Opted To Offer 100% Med Coverage
The high cost of medical insurance has caused many American companies to scale back on benefits they offer to employees, but one CU decided to veer in the opposite direction.
CoastHills Federal Credit Union recently told its staff it will pay 100% of medical, dental and vision insurance premiums-not just for its 155 employees, but their families, as well. CoastHills CEO Jeff York told The Credit Union Journal the cost of the move will be offset by less turnover, lower training expenses and better service for members.
"It is a huge investment," he acknowledged. "We want to be the employer of choice in Central California. It will differentiate us from other financial institutions in the area. We'll attract and retain the best of the best employees, and we'll be the No. 1 financial institution in the Central Coast."
According to York, CoastHills has always paid 100% of medical premiums for employees, but the previous plan made adding one's spouse, children or family too expensive, causing many people to leave the plan and arrange for their own insurance.
The unintended result: premium costs were rising, partly because the claims-to-premiums ratio was 120%.
The new program will increase the number of participants.
CoastHills, which was known as Vandenberg FCU prior to Oct. 20, 2003, serves 45,000 members in San Luis Obispo and Northern Santa Barbara Counties. York said the area contains about 850,000 people-sparsely populated compared to the rest of Southern California. He said that was one reason to do something unusual.
"Everyone was zigging one way-cutting benefits-so we zagged," he said. "I've never seen benefits bring somebody to tears, but several people were crying when we told our staff what we were doing. We want other financial institutions to follow suit, even those in our area, because that's a service to our community."