Healthcare Update – Insurer Authorization / Cost Comparison Tool
If your spouse or child is not on your health plan and you want them to be able to talk to the insurer, you need to complete an authorization form every 12 months stating that the named individuals can speak to the insurer on your behalf. This has to be done for HIPAA purposes, we strongly recommend that if your kiddos or significant other are on a different health plan than yourself, you should have the primary member complete an authorization form. Please check with your HR personnel, health insurance broker, or health insurance carrier if you need the authorization form.
Maine created a handy site that allows you to search for the estimated cost of common procedures at many doctors/facilities in Maine last year. It doesn’t guarantee cost, but it is a quick way to compare costs.
Cost Comparison Tool
As always, please let me know if you have any questions regarding the Affordable Care Act or employee benefits.
Elizabeth Ingram
Account Manager, Employee Benefits
CU Insurance Solutions
Phone: 800-287-3379 x 312
info@insurancetrust.us
ACA Update – 1095 Tax Forms
Tax season is upon us…
Please be aware that you and your employees who had health insurance in 2015 will be receiving Form 1095 if you have not already.
Carriers and the Marketplace have until March 31st to send these.
If you switched plans during 2015, you may receive more than one Form 1095.
There are 3 different Form 1095s:
- Form 1095-A: Is for coverage through the Marketplace
- Form 1095-B: Is for coverage through a fully-insured group (from the carrier)
- Form 1095-C: Is for self-insured group coverage
The Form 1095 is to be used in completing 2015 individual taxes.
It does not get sent to the IRS but does need to be kept on file in case of an IRS audit.
The Form 1095 will be sent every year going forward but will need to be sent by February 1st beginning in 2017.
As always, please let me know if you have any questions regarding the Affordable Care Act or employee benefits.
Elizabeth Ingram
Account Manager, Employee Benefits
CU Insurance Solutions
Phone: 800-287-3379 x 312
info@insurancetrust.us
Strategies for Tellers to Promote Interest in Your Credit Union’s Services
You’ve heard it a thousand times…”I can’t possibly cross-sell at the drive-up window!” “Everyone is in a rush.” “They’re always on their cellphones.” “If they wanted to talk about products and services they’d come inside.” Negative assumptions like these become all too commonly accepted in a branch environment. Once assumptions like these take root, they are incredibly difficult to overcome.
In truth, the assumption that “cross-selling through the drive-up is impossible” is costing financial institutions an incredible number of opportunities. Americans are using drive-ups now more than ever. An average branch’s drive-up accounts for a massive portion of its transaction totals. For instance, Jim Bishop, president of Barrington Bank and Trust in Barrington, IL, said that 40% of a teller’s total transactions occur at his bank’s drive-up (reference). When tellers fail to even try to cross-sell at the drive-up window, they are missing nearly 50% of the opportunities they are faced with!
The negative assumption about cross-selling through the drive-up causes additional issues as well. In our experience, tellers who are uncomfortable cross-selling products and services will regularly volunteer to work the drive-up so that they have an excuse for not reaching their goals. Afterall, if cross-selling at the drive-up is “impossible” and he/she always works the drive-up, how can he/she ever be held accountable for falling short of his/her cross-selling goals? Tellers we have spoken to about this issue have admitted that they’re willing to take on the additional transaction workload as long as they aren’t held to the same cross-selling goals as others. So, in addition to missing all important opportunities, employees may also be using the drive-up window as shelter from accountability, which could also cause tension in your branch (“Why does she always get to work the drive-up?!” says the employee who doesn’t like to cross-sell either…).
Why Drive-up Customers/Members May Be the Best to Cross-sell to:
Drive-up customers/members are typically always drive-up customers/members. In other words, they rarely, if ever, come into the branch. Meaning your employees have likely never attempted to cross-sell them anything. This is a huge opportunity! With few exceptions, all customers/members can benefit from at least one, if not many, of your financial institution’s products and services. If these customers/members have never been approached about any products/services since they opened their accounts, they present a huge opportunity to increase product referrals.
Further, many drive-up customers/members do not have accounts with your financial institution. They are simply using the drive-up to quickly cash a check drawn off of your institution. This is a great opportunity to tell them about the benefits of your institution and why they should bank with you. After all, you have them captive at this moment–this is the best time to talk to them!
So if the drive-up customers/members are prime candidates for product/service cross-selling, how can you do it successfully?
3 Proven Methods to Successfully Increase Cross-sales at the Drive-Up:
Focus on the auto.
One of the most common obstacles our clients tell us they face in cross-selling products and services is getting the conversation started. Truth be told, this is an even bigger problem through the drive-up, where tellers lack the face-to-face (without a window in between) interaction with a member. Conversations at the drive-up simply seem to be a bit cold.
That said, it is much easier to chat about things that are readily available. Tellers often tell us they feel comfortable talking to customers/members coming through the drive-up about their pets, their children, hobbies that are apparent by visible equipment, etc. These are conversations that are easy to get going because they come organically from what the teller can see in the customer’s/member’s vehicle.
What is the one thing that all customers/members that are coming through the drive-up have in common? An automobile! Discussing possible automobile solutions your institution can offer customers/members coming through the drive-up is an easy transition for tellers to make because it is organic. It doesn’t seem forced. Perhaps you have a special auto loan refinance rate. Or maybe you are partnered with or have an affiliated insurance company through your institution. This is the perfect time to mention how you might be able to save the member some money.
When the transition is easy, tellers are much more likely to start these all-important conversations. Instruct your tellers to focus on your auto-related products/services and they’ll be off and running in no time.
The power of buck slips.
Another common obstacle we hear from our clients is that people coming through the drive-up are “always in a rush.” Truth be told, oftentimes this is true. A major purpose of the drive-up is to help service those customers/members who don’t have the time to get out of their car. We want to be convenient for those customers/members. However, this isn’t an excuse to miss an opportunity to educate the customer/member about your products and services.
Buck slips provide your tellers the opportunity to start a conversation with a customer/member at the drive-up in a respectful manner. “Start” is the key word there because the representative only has the time to tell the customer/member that he/she is including the buck slip with the receipt and that the customer/member can look it over at his/her leisure. The buck slip will educate the customer/member when he/she isn’t in a rush. Tellers are setting themselves up for failure when they attempt to rush through a cross-sale and the features and benefits when a customer/member doesn’t have the time. By recognizing when a customer/member is in a rush, but still including an educational piece about a product or service that can be of benefit, your tellers are still taking advantage of the all-important opportunity.
Work with your marketing department (we can help with that too) on designing some professional looking buck slips for the products/services that you want to promote. You may have even more success if you offer some kind of incentive for people to sign up (i.e., a $25 gift card for anyone who opens a new checking account). Ideally, you’ll convince the person to pull around the building and come inside right there and then, and an incentive can help you do that.
When using buck slips, make sure your tellers are notifying the customer/member that they are including the buck slip with the receipt and why. Otherwise it will seem like marketing junk mail. However, if your tellers are telling the customer/member why they are including the buck slip, it will seem much more personal. For instance, a teller could say, “Thanks again for stopping by today to make this deposit to your savings account Mr. Smith. I did notice that you don’t currently have a checking account with us. I’m including some information about our checking account with your receipt. We’re running a special right now where you’ll get a $25 gift card if you open a checking account so I thought I’d let you know. Have a look at the information when you have a moment–I think it’d be a really great product for you. Have a great day!”
Roll up your sleeves and get behind the line yourself.
The most effective leaders lead by example. And any leader knows that you can’t ask your employees to do what you’d be unable or unwilling to do yourself. As they say, the proof is in the pudding–you may just need to prove to your employees that cross-selling through the drive-up is possible. Remember what we discussed earlier; the “cross-selling through the drive-up is impossible” assumption is genuinely pervasive. In our experience, it is widely accepted in retail banking as Truth. In the face of this assumption, your employees are much more likely to look to you to show them that it can be done.
Once you have the tools in place to help make your employees successful (i.e. buck slips), get behind the line and show them how it’s done. While your teller is processing the drive-up customer’s/member’s transaction, start a conversation regarding a product/service with the customer/member. Show your employee how easy it is to discuss auto loan refinances or auto insurance with a customer/member when he/she is sitting in a car. Show the teller how you would call attention to the buck slip you are including with the customer’s/member’s receipt. Ultimately, you want to show your tellers that this is possible and it is something you are comfortable doing. Seeing is believing!
Failure will undoubtedly be a part of this, and that’s OK too. It’s great for your team to see that even you get rejected when offering products and services. Show them how you are able to get past the rejection and keep on referring. Again, leading by example is one of the best tools you can use to get your team motivated.
Ultimately, compelling your tellers to cross-sell through the drive-up is a critical component of drastically increasing your branch’s performance. In failing to do so, you are missing an immeasurable opportunity. Just think of how many cars pass through your branch’s drive-up on a daily basis! As with most problems, successfully cross-selling at the drive-up just takes a little thinking outside of the box. Have your team brainstorm some of their own ideas–you’ll be amazed at what they come up with.
Source: FrontLine Service Solutions – Hinsdale MA
Eliminate Force-Placed Auto Insurance Tracking with Vendors Single Interest Protection
When a member borrows money for a vehicle, it is the credit union’s right to require them to show proof of comprehensive and collision insurance to protect its interest from damage or loss throughout the life of the loan. However, there is no guarantee that the member will keep it in force throughout the entire term. If the member’s insurance lapses, the credit union will traditionally force-place auto insurance on the member’s loan, adding the premium to the loan principal.
This force-placed (or lender-placed) process often creates member complaints and the need for credit union employees to play “detective” by tracking the insurance status of every loan on an ongoing basis. Credit unions are faced with a tough balance between dedicating administrative resources to verify member insurance status, protecting assets with force-placed insurance and endangering member relationships due to dissatisfaction. This issue has guided many credit unions to seek the alternative protection solution, Vendors Single Interest (VSI), also referred to as Lenders Single Interest (LSI).
Vendors Single Interest
Vendors Single Interest insurance provides broad protection against collateral loss for the entire loan portfolio, without the need to track insurance status. VSI simply protects the credit union’s interest against any loss that occurs if they repossess damaged collateral and the member’s insurance has lapsed. Learn more >
How does it work?
At the time of the loan, the credit union adds the Vendors Single Interest premium to the member’s loan contract. The premium is based on each credit union’s individual loss ratio experience. Our agency has seen premiums that range from about $15 to $130 per loan. Typically, most credit unions pass this cost along to the member.
What is the difference between CPI and VSI?
Vendors Single Interest is a change in mindset from a reactive measure to a proactive measure. Because the coverage is financed into every loan, it proactively protects the credit union and the member from uninsured damage or loss as opposed to the traditional reactive measure of tracking insurance status and force-placing coverage after the member’s insurance has lapsed.
What about member dissatisfaction?
Credit unions who have switched to VSI have seen a vast reduction in overall member complaints as it concerns force-placed insurance woes. Though the added cost is passed along to the member at the time of the loan, the premium has little affect on the overall payment and has been viewed as an acceptable requirement in the overall loan agreement.
How does switching affect our existing loan portfolio?
Switching from the traditional collateral protection insurance to Vendors Single Interest is surprisingly easy. When a credit union makes the change, our vendor partners will assume coverage for a credit union’s existing loan portfolio free of charge. This eliminates the need to track insurance on existing loans and the inconvenience of dealing with multiple providers.
For more information, contact CU Insurance Solutions Senior Account Executive Tim Dalton at tdalton@insurancetrust.us or complete the contact form below.
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Introducing My Credit Union Benefits 2.0
In the spring of 2014, CU Insurance Solutions launched the first iteration of the My Credit Union Benefits marketplace website. The website was created with the mission of assisting Maine credit union members in making the important decisions necessary to purchase individual health insurance with the recent changes under the Affordable Care Act. The private marketplace website was designed to allow credit union members to request a health insurance quote assisted by a licensed health insurance expert who will help them find the right policy to meet their unique needs from a variety of individual health plans from insurers doing business in our Maine communities. The website also offers access to dental insurance, voluntary benefits, term life, accidental death & dismemberment and auto & home insurance coverage as well as legal & ID theft protection.
What’s New?
Local Service – CU Insurance Solutions has partnered with a local Maine employee benefits expert dedicated to assisting members with enrollments for individual health insurance. This change has also made more insurance carrier plan options available to Maine credit union members including Anthem and Harvard Pilgrim.
New Website – The My Credit Union Benefits website has been reformatted to offer an improved mobile friendly experience. The website has a responsive design that allows members to navigate the site on any device and enter information into forms that integrate with mobile keyboard features.
Simple and Free –The My Credit Union Benefits website is now a free community hub for Maine credit unions to refer their members in need of coverage. Many of the coverage options include special group discounts specifically for members of Maine credit unions. We have simplified the onboarding process by offering one universal website option and referral arrangement.
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For more information, please contact Elizabeth Ingram at eingram@insurancetrust.us or 207-773-0925.
Beyond Due Diligence: The Importance of Vendor Product Comparisons
Is your credit union offering the very best services to your members?
When it comes to due diligence, credit unions are intimately aware that financial stability and ethics both play an important role in the reliability and trustworthiness of a third party member service vendor. Third party vendor due diligence has become vitally important to credit unions in terms of protecting member assets, controlling reputational risk as well as adhering to all aspects of consumer laws, rules and regulations. However, traditional vendor due diligence doesn’t necessarily indicate how competitive a particular service is within the marketplace. It is equally important to conduct a side-by side comparison of the competing services available in the credit union space to truly understand where a product stacks up against the competition.
Exploring side-by-side vendor comparisons
Beyond the importance of assessing the vendor’s due diligence categories (financials, AM Best Rating, ethical practices etc.,) credit unions should be concerned with vendor service, ease of use to the member, cost, profitability and whether the activity is critical to their mission. Because every member benefit takes a focused and consistent effort from the entire organization to be successful, it is imperative that CUs are truly investing their time in the right benefit and vendor for their membership. CU Insurance Solutions has seen many Maine credit unions grow exponentially in the areas of member satisfaction and non-interest income revenue by making product comparisons an integral part of their due diligence process in conjunction with reviewing internal processes and staff training. It is our commitment to helping credit unions to facilitate these initiatives by providing third party vendor research and side-by-side comparisons specific to the ancillary insurance options and credit union member services that we provide.
Finding an apple among oranges
Though each member service is unique, they all have commonalities that can be compared. including cost, coverage, ease of use, customer service/claims support and an evaluation of costs involved with monitoring and support of the third party after the contract is implemented. Above and beyond the features and benefits of a particular product, it’s helpful to understand what is most important to members. Asking for feedback from those using the services is a key element to learning where a credit union is doing well and where the areas of improvement may be. Member surveys are a great place to capture this information and can be used as a tool to drive actionable change. According to the Member Intelligence Group (a consulting firm specializing in credit union member research), credit unions “must focus on reducing member effort in order to improve satisfaction, deepen loyalty, and build promoters”. The firm also cites convenience as one of the most important factors to improving member loyalty. It ultimately boils down to measuring how often members are utilizing a benefit and using feedback to gauge satisfaction. This learning process can provide the insight to make improvements to internal processes and conclusion of which vendor/s are the best fit. When we improve the member experience, an opportunity for growth is created that helps to enhance both member loyalty and income for the credit union.
The empowering result is that credit unions have a unique advantage over larger financial institutions in their ability to remain agile by reviewing member services and making improvements based on due diligence and vendor comparison with the best interest of credit union members in mind.
[author] [author_image timthumb=’on’]http://insurancetrustweb.com/cuis/wp-content/uploads/sites/2/2015/12/Seth.jpg[/author_image] [author_info]Seth McClellan, Marketing Director – CU Insurance Solutions[/author_info] [/author]
Reducing Expenses by Improving Equipment Maintenance Process
When it comes to reducing expenses by improving operational efficiency; one of the lesser talked about areas of opportunity for credit unions lies within their equipment maintenance process.
The Struggles of Equipment Maintenance
When equipment breaks at the branch it creates a chain reaction that sometimes involves everyone from the front-line teller staff to upper management to resolve. Credit unions must also manage many individual annual maintenance contracts with differing expiration dates and cost increases at renewal. This process is both highly time-consuming and costly for credit unions.
Scale, Cost and Efficiency
The economy of scale allows large banks to cost-justify a central management software platform that drives both back office and branch support. These platforms can incorporate any banking equipment (ATMs, drive-ups, servers, copiers, etc.) and automate Service Dispatch, Consumables, Inventory, Accounting, Custom Reporting, and more. The major advantages are that errors are eliminated, communications expanded, and management controls enhanced by leveraging technology to automate tasks.
A Solution for Credit Unions
Traditionally, automating a process that is otherwise done manually can be a considerable investment in terms of adding hard costs in the short term, in exchange for eventual soft-cost savings. However, CU Insurance Solutions has a solution through our vendor partners at Equips to bring the same functionality and efficiency to credit unions of all sizes with no out-of-pocket implementation costs. In addition, the program has also helped Maine credit unions to save considerably. In fact, credit unions have typically seen a reduction in their equipment maintenance “hard costs” by 14%. And a 19-branch client recently reported a 79% reduction in staff “soft costs” as well.
Network Platform
Our vendor partners at Equips have created a network of credit union clients in 34 states (including Maine), the Equips team supports thousands of branches through a platform named E-LINK. The E-LINK hub receives and distributes raw data among various departments; also performing complex analytics to produce customized management reports. Tasks previously routed through HQ can now confidently be delegated to the branch level, with automated notifications throughout your Operations staff. You outline your vendor specifics, and E-LINK automates the rest.
Peer Analysis
If you are interested to learn more, CU Insurance Solutions would be happy to arrange an online demo or facilitate a Peer Analysis (contrasting what you are paying for your equipment maintenance with what your peers are paying for that same equipment mix) that also documents your Equips savings opportunity.
For more information, contact CU Insurance Solutions Executive Vice President Tim Dalton, at tdalton@insurancetrust.us or complete the contact form below.
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Should GAP Insurance and Vehicle Service Contracts Be Sold By Dealers Only
During a recent CUNA Lending Council panel discussion, a Washington State auto dealership was asked to state their position on the topic of GAP Insurance and Vehicle Service Contracts offered by credit unions. The dealer’s General Manager, Mary Byrne provided a testimonial that was starkly opposed to credit unions offering these types of ancillary programs at all. In a recent article published by CUToday.com, she was reported as saying:
“I truly believe that is our customer. I believe I’m in the business of selling cars and you are in the business of lending money. I don’t think there is any confusion. I think we’re in the business of selling extended warranties—you are in the business of lending money. Dealerships’ margins have shrunk to almost nothing; it’s a good month if the dealer can make 2% on gross sales.”
Byrne provides a one-sided argument for the position for auto dealerships as it concerns ancillary income from GAP and Vehicle Service Contract sales and the impact they have on the overall profit margin. There is one major flaw in her reasoning. Once the sale is done and the financing is secured with the credit union, the credit union now owns that car, NOT the dealership. Doesn’t the credit union have a right to protect their collateral and members with (in many cases) superior protection products at a much better value to the consumer?
We know that credit unions have far less market share as a percentage of financing opportunities in New England and across the US. In fact, in many markets, up to 80% of car buyers arrange their financing through a dealership at the time of purchase. Both credit unions and auto dealers would probably agree that annual percentage rates are extremely competitive and it’s incredibly difficult to yield a healthy ROI solely from interest income alone. To that end, credit unions need the opportunity to earn non-interest income from ancillary products as well, especially in indirect lending environments where they are paying an average of 2% to the dealers in an upfront flat.
Despite the necessity of a credit union’s financial wellbeing, should credit union members not also have a right to purchase similar coverages that are offered at the dealership? It makes sense that Byrne would be upset. Just in New England alone, we are seeing GAP prices of $799-$899 at the dealers compared to $299-$399 at Credit Unions (with a superior product – in most cases). With Vehicle Service contracts, the average profit at a dealer can range from $1000-$1500, where the Credit Unions make a modest profit of a few hundred dollars. Much like when the internet brought an age of online pricing and comparison, Byrne is clearly starting to feel the pinch of an open market with informed consumers who are interested in better value and better service at claim time.
All pricing aside, it is important to ask any customer who they would prefer to help them when they total a vehicle or have a mechanical breakdown. Who will go the extra mile for the member long after the sale? The ultimate trump card for Credit Unions is this specialized personal assistance – rarely played when comparing auto dealers’ products versus the Credit Union products. Credit Unions offer GAP Insurance and Vehicle Service Contracts to protect members from unplanned events that can happen during the life of a loan. Our data states that 82% of members will have at least one breakdown within a 5 year period, and nearly 20% of vehicle accidents result in a total loss. These products serve as a necessary component in helping to offset the risk of costly charge-offs from delinquency, rooted primarily in members’ inability to pay repair costs.
From inception, it has been every credit union’s mission to offer services that safeguard the financial commitments of its members, and ultimately the health of the credit union.
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Spring 2016 Lending School with Brett Christensen – Save the Date!
CU Insurance Solutions and CUAlliance are pleased to announce our Spring Lending School to take place on April 11-12, 2016 at America’s Credit Union Museum in Manchester, NH. This event is part of our ongoing Insurance Trust University training initiative and semi-annual live lending school workshop. This focused and informative session is designed for CEOs, executive management, lending managers and loan staff and will be split into two 1-day sessions presented by renowned credit union industry speaker, Brett Christensen.
Brett Christensen
Brett is the owner of CU Lending Advice, LLC based in Euless, TX and has worked directly with credit unions across the U.S. and Canada as an educator and consultant on focused lending topics for more than 10 years. The 2-day lending school program that Brett has created is designed to provide specific advice and best practices that help to improve lending process and sales results as well as refresh lending expertise and explore the critical essentials for lending success. Prior to his experience as an educator, Brett worked for five years at Clark County Credit Union in Las Vegas, Nevada ($680 Million in assets) and has served in the United States Air Force as a Civil Engineering Officer.
America’s Credit Union Museum
Located in Manchester, New Hampshire on the site where America’s first credit union opened its doors in 1908, America’s Credit Union Museum is an exciting and dynamic organization that is no mere repository of documents and artifacts. In addition to celebrating the remarkable efforts of the people who built the credit union movement over the past 100 years, it plays a leading role in documenting today’s achievements while helping to prepare credit unions for upcoming challenges.
Complete the form below to request registration info!
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Illuminating Member Service with Lending Solutions Inc.
CU Insurance Solutions is pleased to announce our partnership with Lending Solutions Incorporated (LSI), an innovative company helping credit unions grow their loan volume while serving their members more efficiently. LSI provides customized programs that act as an extension of your credit union by serving your members beyond traditional business hours to stay competitive in today’s demanding service environment.
You may remember Lending Solutions Consulting, Inc. (LSCI) as the company behind the educational services that CU Insurance Solutions has facilitated for the past three years with our semi-annual University of Lending school initiatives with guest speaker, Ed Swanson. Their sister company, LSI, was founded by Rex Johnson and provides services that put into practice the philosophies and teachings that he, along with Ed and his other consultants, have been teaching to credit unions across the country.
Illuminating Your Member Service Needs
Lending Solutions provides a full suite of services to facilitate consumer lending, mortgage origination & processing, collections, and member service transactions including:
- 24/7 Loan-by-Phone
- Internet Lending
- Indirect Underwriting
- Outbound Services
- 24/7 Financial Service Transactions
- Mortgage Origination & Processing
- Collections Outsourcing
Whether you need support in the areas of lending, member service, or collections, LSI has a solution to meet the unique needs of your credit union. To find out more about Lending Solutions Inc. and the services they provide, check out the video link below for a brief company overview from Rex Johnson or visit their website.
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For more information, contact CU Insurance Solutions Senior Account Executive, Tim Dalton, at tdalton@insurancetrust.us or complete the contact form below.