Oct. 5, 2012

Editor’s Note: This is Web-only bonus coverage from “Is Self-Funding Right for You?” in the October 2012 issue of CUES’ Credit Union Management.

If your credit union is interested in new health plan options, consider self-funding. It may not be as widely discussed as fully insured plans, but that doesn’t mean it isn’t popular with employers. According to the Employee Benefit Research Institute, self-insured plans cover 55 percent of workers who have health insurance.

In a traditional plan, the employer pays a fixed premium to the insurance carrier, which then bears the financial risk of paying claims. Self-funded plans shift that risk to the employer in exchange for more customized plan design, tighter control over costs and elimination of the need to pre-pay for coverage.

Every expert we talked with stressed the importance of pairing self-funded plans with robust wellness programs. The secret, they say, lies in using preventive care strategies to control healthcare costs.

“We place a lot of emphasis on it,” says Elizabeth Jimenez, SPHR, VP/human resources and organizational development at $562 million/54,000-member Tropical Financial Credit Union (www.tropicalfcu.org), with 185 full-time equivalents in Miramar, Fla., of the CU’s wellness efforts.

Involving everyone on the team is important, she says. The CU has launched a wellness committee, composed of employees, to create such activities as contests and fairs. Events are designed to encourage employees to be proactive when it comes to their health.

“We had a health fair where we invited nurses to do health screenings,” Jimenez says. It provided employees with convenient access to preventive care, and Tropical Financial CU also offered a financial incentive as further motivation. “If employees attended the fair and completed the health assessment, they got a reduction in their premium,” Jimenez says.

Tropical Financial CU also brought in an employee assistance program provider to focus on prevention and education. “Usually EAPs are there for when there’s trouble,” Jimenez says. “But ours has a nurse that does weigh-ins for our weight loss program, and also provides educational material that reinforces the prevention message to our employees.”

Because Tropical Financial CU serves a three-county area in South Florida, Jimenez adds that engaging branch staff has historically been a challenge. The EAP is helping the organization overcome that hurdle. “They’re not only working with employees at our headquarters, they’re visiting the branches as well,” Jimenez says.

Wellness programs help to control risk, but Eddie Black, president/CEO of $22 million/3,765-member Trico Community Federal Credit Union, with seven FTEs in Helena, Mont., is quick to point out that the strategy is only successful if employees participate.

In 2011, he says there was zero participation in the CU’s program among staff, which he attributes to a lack of encouragement from the former management team. “One of the things we did this year was mandate that our employees participate in at least the core part of the wellness program,” Black says. The CU pays 100 percent of health insurance premiums, so employees were told if they didn’t participate in the wellness program, they would have to participate in the premiums.

The other prong of Trico Community FCU’s strategy was to provide employees with serious incentives for participating. The CU is able to self-fund its health care insurance via a multi-employer network through the Montana Credit Union Network. MCUN has established a competition associated with its wellness program, and CUs can receive cash prizes—up to $1,000 for first place—based on employee participation.

Black was so keen to motivate his crew that he offered to match any prize money the team scored, and will allow the seven employees to divide the loot among themselves. He also appointed what he calls a “wellness champ,” an employee who “pokes and prods folks” about completing various wellness activities, such as getting their teeth cleaned and completing their health assessments. The plan seems to be working. “Everybody is participating,” Black says.

Julie Knudson is a freelance writer and owner of Olympic Bay Media, Inc., Arlington, Wash.