ABA Banking Journal - June 2008 - (Page 26A)

COMMUNITY BANKING DIGITAL EDITION BONUS FEATURE for medical plan costs Ohio banker Blair Hillyer’s experience was unique among eight bankers discussing human resources issues: His First National Bank of Dennison’s medical insurance expenses have actually been falling. “We’ve been fortunate,” says Hillyer, president and CEO of the $170 million-asset bank. “We’ve had some price wars in our market, so we’re actually paying less for health insurance than we were five or six years ago.” Not that there aren’t significant costs involved. The bank pays 75% of employees’ and dependents’ coverage costs. While the insurance program has a $1,000 deductible, the bank reimburses employees for everything over $200. For all the expense, usage varies tremendously. “We have a few folks who use it regularly,” says Hillyer, “and a whole bunch that never use it.” Employee medical plans represent one of bankers’ biggest human resources expenses and challenges. In some ways, it resembles a never-ending struggle to fill a bottomless pit. Hillyer and seven other members of ABA’s America’s Community Bankers Council discussed the struggle and how they are coping with it during an ABA Banking Journal roundtable. George Marx’s Copiah Bank, N.A., Hazlehurst, Miss., has a By Steve Cocheo, executive editor similar approach to Hillyer’s, but hasn’t been so fortunate on the price side. “When our policy renewed in January,” he says, “it was the first time in my memory that we haven’t had an increase. We have had increases as high as 30% in a single year.” There is a push and pull, too, between what level of expenditures works for the bank, and what other employers seeking the same employees offer. Marx, president and CEO of the $130 million-assets bank, believes his program is competitive with other area firms’, but “it’s a constant challenge. Most of the regional and larger community banks in our state pay at least 70% of plan costs, and some pay it all.” Copiah Bank pays 70% with a $1,000 deductible. Community banks, in addition, face the challenge of programs based on small employee groups. One of the roundtable bankers noted that the spouse of one employee required a liver transplant, the costs of which would drive up premiums the next year. And the mix of veteran employees versus younger people can influence cost experience, and therefore pricing, as well. For a small pool of people, a single procedure like a transplant weighs much more heavily than in a larger bank with thousands of employees and family members. Rx Uniting for cost savings Some of the bankers have benefited from state bankers associations’ joint insurance programs. For instance, John www.ababj.com/subscribe.html ABA BANKING JOURNAL/JUNE 2008 26a http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - June 2008

ABA Banking Journal - June 2008 Contents Editor’s Column Do Fee-based Services Have an Edge? Snapshot: Net Interest Margins Vary Sharply with Size 100th Anniversary: Then & Now Letters ABA Resources ABA Chairman’s Position "What? No Annual Surprise Bonus?" Pass the Aspirin Cover Story: Top Community Banks: How They Did... ...And How They Did It Charter Bank First East Side Savings Bank Mackinac Financial Corp. The Peoples Bank Managing the E-mail Monster In Brief Handling PEPs in the Age of "L'affaire Spitzer" Mailbox Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - June 2008

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