MADISON, Wis. (8/2/13)--A new CUNA HR/TD Council white paper, "Employee Benefits: The Future is Voluntary," focuses on how credit unions are evaluating and incorporating supplemental insurance programs.
It includes information about:
Options in the marketplace;
Presenting the business case for a supplemental insurance program;
The concept of "make or buy"; and
The employee benefits landscape has been transformed during the past decade, by burgeoning costs, regulatory changes and new benefits options, said the council. During and after the great recession, employers reduced their benefits budgets and shifted costs and decision making to employees. Organizations have also become more creative in offering competitive benefits that help them to recruit and retain the best workers.
Given the risks of self-insurance, the paper notes most credit unions choose to purchase from an insurance company. In the case of life insurance, however, the Business-Owned-Life-Insurer (BOLI) structure can be attractive for credit unions, because payments to the fund--as well as capital appreciation--are tax-free. While interest rates on investments remain low, the BOLI offers a better return on investment, the paper said.
Choosing the right vendor partner for supplemental insurance requires due diligence, including seeking recommendations from credit union peers and state leagues, and assessing insurance carriers' financial strength, the council said.
This is the second white paper in a series about employee benefits, and it is a follow-up to 2012's white paper "Credit Union Benefits Programs: Meet Employees' and Your CU's Financial Needs."
To access a copy of the paper, use the link.