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Controlling Employee Benefit Costs Strategically

In December 2018, the Bureau of Labor Statistics reported the average cost to a U.S. employer for every hour an employee worked was $34.05. It’s probably no surprise that nearly 30 percent of that cost, or $10.20, was for employee benefits. In today’s hot job market, talented employees expect to have good benefits. Providing benefits is not only expensive, but necessary, to attract and retain high-quality candidates.

Given the increasing cost of healthcare, controlling employee benefit expenses can be a real challenge. According to a 2014 survey by the Society for Human Resource Management, 80 percent of HR professionals said rising healthcare costs were their main concern for the near future.

Finding an answer

Searching for a way to manage employee benefit costs, Vizo Financial Corporate Credit Union (Vizo Financial) looked for a solution that would offer the ability to control costs while providing the benefits needed to meet employees’ expectations.

The search ended when Vizo Financial discovered the I-Care program, developed by InterLutions, a CUSO wholly owned by Corporate Central Credit Union. Founded in 2015, the company’s goal is to develop innovative business solutions to advance the credit union industry and movement. In 2016, InterLutions introduced I-Care, an answer to the question of how to manage the risks and costs of providing health insurance.

Like the credit union movement, the story of I-Care is one of collaboration. The innovative solution allows credit unions to pool resources with other credit unions and minimize risk by spreading it over a larger healthcare-user population. By joining forces with others in the movement, the effects of volatility and the costs of health insurance are reduced. The expense reductions, along with big data analytics and consultative HR experts, have allowed credit unions to offer more competitive, enhanced benefit plans. Partnership with I-Care also gives credit unions the flexibility to choose from multiple networks, while allowing determination of plan design and structure to meet staff needs. Currently, the program serves more than 5,000 credit union employees and family members.

After enrolling in the I-Care program for its own internal use, Vizo Financial decided to find a way to offer its members the ability to control costs while building a robust benefits program for their staff. The Corporate and InterLutions announced a partnership on June 3, 2019, to offer the revolutionary healthcare alternative to qualifying members.

Identifying the “must-haves”

When a credit union is considering an employee benefits solution, there are certain attributes which can make a big difference in the success of your program. Here are some criteria Vizo Financial found worth considering:

  • Flexibility – Avoid a one-size-fits-all solution that doesn’t allow a credit union to design its own plan and strategy. Look for one offering ways to maintain preferred networks and plan options.
  • Analysis and Reports – Ensure a solution offers the ability to manage costs with informative reports, as well as analysis that helps pinpoint trouble, like rising costs that negatively affect your bottom line. Better data leads to better long-term decisions.
  • Collaboration – Find a benefits provider interested in listening to a credit union’s needs and working together to develop a solution. Providers that are part of a larger network have access to valuable resources to help build the most effective program.
  • Wide range of options – Confirm the provider offers a variety of options, like wellness programs, to enhance benefits plans.
  • Large population of users – Plans that cover a larger number of healthcare users will minimize risk and help to decrease costs.

Reaping the rewards

In a candidate-driven job market, talented recruits will compare benefit packages when reaching a decision. With the costs of benefits accounting for nearly 30 percent of total compensation costs, credit unions must manage their benefits program well to reap the best return on that investment.

In 2017, a survey by the Society for Human Resource Management on the strategic use of benefits uncovered some interesting information. Those organizations that leveraged benefits to recruit and retain employees were almost twice as likely to have more satisfied employees. They also reported better business performance compared with companies that were not strategic with their benefits programs.
Creating a strategy that gives a credit union the ability and the time to design benefits programs to fit a its culture and employee needs is worth it. Not only will employees be happier and feel more valued, they will be more engaged in working for the organization’s success.

Using a benefit solution that has the ability to decrease costs while providing enhanced employee benefits makes sense for everyone.

Authors: Rodney May, Vizo Financial Corporate Credit Union and Jesse Kohl, InterLutions

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