SAN DIEGO — With a questionable economy, the challenge for credit union human resource departments continues to be how to best approach benefit offerings.
"Extensive benefits are a major part of every budget year, as it's an important element in retaining and attracting top talent," said Art Brooks, vice president of BeneTrac, an electronic enrollment and employee benefits administration solutions provider. "Based on the staff population, whether boomers or Gen X or Gen Y, matching benefits to particular populations within the employee pool has to be taken into consideration moving forward. It's a balancing act of providing the benefits they expect with what the credit union can afford and determining which major elements will be incorporated in the offering."
Looking ahead, he added, that more employers that offer fully covered insurance packages are considering adding high-deductible health plans and health savings accounts into their benefits' mix. In addition, some are opting to offer individual insurance products, such as AFLAC to help meet employee expectations. According to health insurance industry experts, enrollment in HDHPs that qualify for contributions to tax-sheltered health savings plans has tripled to three million people in the last 10 months as employers look for alternatives to help cut rising premium costs.
HSAs are tax-free savings accounts that can be used to pay for medical expenses, including prescription and over-the-counter drugs incurred by individuals, spouses or dependents. These accounts are accompanied by high-deductible, comprehensive insurance policies that cover preventive care and larger medical bills. Unused HSA money rolls over year-to-year and can then be used to pay for medical care up to the plan's deductible.
Experts have been touting HSAs as the biggest service offering since IRAs, with HSAs estimated to reach 11.2 million by 2010.
Brooks said the future still looks bright for HSAs, despite it being a key agenda item for the outgoing Bush administration.
"I think from an ideological perspective HSAs remain a good idea. They give employees a pretax pool of money, which is something employers and employees are both still excited about," said Brooks. "What we've seen is that the government comes up with great ideas, but they lack market adoptability. With younger people where money is more of a concern than medical benefits, the pretax savings of HSAs is appealing. We haven't seen a major adoption yet, but there has been increased interest in these accounts. With the other factors of the economy and the uncertainty of some type of universal health care, it is unlikely HSAs will be a priority of the new administration."
He said about 40% of his clients have opted to offer HSAs, while the remainder continue to take a wait-and-see approach. For those sitting on the HSA fence, there has been an escalation of individual product offerings for staffers to almost customize according to their needs: from medical short-term disability and long-term care insurance to cancer policies. The options are then provided as a companion to a fully insured plan in a bid to remain competitive.
"The worker population we see now is dominated by the boomers. For now Generations X and Y's ranks are rising but still not dominating. As a lot of the workforce is married, having families facing economic uncertainties, having their medical needs met becomes more vital to the workforce of the future and HR departments have to make the transition to meet their changing needs."
Brooks added that over the next 12 months, how the workplace itself changes and is redefined will also drive what employers will be able to provide for their staff to attract and retain the best while remaining competitive.
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