WALNUT CREEK, Calif. – Skyrocketing health care costs isn't something employees of Pacific Service Credit Union have to worry about. A recent national Kaiser Family Foundation survey finds that to combat double-digit health insurance premium increases, many employers are opting to slow their hiring process or shift more of the costs on to staffers. Not Pacific Service CU. The over $1 billion credit union is standing out from the competition by saying no to national health insurance trends and for the past 15 years has remained dedicated to paying 100% of health care premiums for full-time employees and their dependents. "We have less than 100 employees to serve more than 67,000 members. We appreciate the effort and commitment of each employee to make our organization an industry leader," said Pacific Service CU President/CEO Tom Smigielski. "We don't want employees worried about how they will care for a sick loved one or how to make ends meet because more of their paychecks are going toward health insurance premiums. This is one way we can demonstrate our commitment to employees." Smigielski adds that it just makes good business sense. "We want to have the best and the brightest on our team, and that means providing benefits which keep our employees healthy and happy. When employees feel they are being treated well, they stay," said Smigielski. "And that helps our bottom line." With employee retention a top HR priority, Pacific Service CU Human Resources Vice President Eleanor Leyva says one proven plus of this move has been the low employee turnover, which over the past five years has averaged about 12% compared to a national average of 30%. "Our year-to-date turnover is 7.48% and we have some 10 employees with over 25 years of service here," said Leyva. "Our standards are high but every employee is enthusiastic about being here and their experience helps us live up to our brand of providing great rates and great service to members." Leyva says heath insurance premiums for families cost the credit union more than $10,500 per year for each employee and includes medical, dental and vision coverage. In addition, coverage begins the month following employment and Pacific Service CU offers prorated health care coverage to part-time staffers. So just how is Pacific Service CU able to do it? Smigielski credits taking a "less is more approach" and making the most of technology to effectively communicate with staffers. "Comparatively speaking we don't have a lot of employees and we make sure that the work is there to justify a new position before hiring someone because we want them to be with us for a long time," said Smigielski. "A lot of organizations our size may opt to have a lot more staff but my philosophy is to create a great comfortable work environment, ask more of employees and give them more in return because they really deserve it -basically the old 80/20 rule." According to Smigielski, whenever the credit union looked at reducing the health insurance premium from 100% the actual savings was minimal. "When you look at the incremental savings versus what our employees are doing it just wasn't worth it," said Smigielski. "With the full coverage our operating ratio is 1.5 to 2% compared to our peers' 2.7%. We've never had to layoff employees and we just feel it is to our advantage to try to treat our employees very, very well." For those employees who have worked for the CU for at least 10 years, Pacific Service CU also pays the premium for medical coverage for employees and spouses upon retirement at age 55 or older. Employees with 25 years of service have their full premium covered as well. The contribution is prorated for employees with less than 25 years; for example, an employee with 15 years of service would receive 60% coverage. A pre-tax health care reimbursement account (HCRA) is also provided, allowing employees to contribute up to $2,000 to health care expenses such as deductibles and prescriptions. In addition, basic life insurance and short- and long-term disability coverage are provided to employees at no cost. Pacific Service CU also offers a 401(k) plan to each employee, contributing 3% of the annual salary upon employment. After the first year, Pacific Service matches 75 cents for every dollar the employee contributes, up to 3% of the annual salary, and up to 6% after three years. Other benefits include on-the-job training, educational reimbursement, employment referral incentives and an organizational bonus plan where all employees can receive a percentage of their annual base salary if the CU achieves its annual organizational goals. Attention has also been paid to staffers' surroundings, which includes inspirational colorful artwork on the walls and such amenities as showers, a jogging trail and lush landscaping. "The double digit inflation of health insurance premiums is a real challenge for everyone and we've wrestled with it too," said Smigielski. "But we're able to continue to do this because of our philosophy that it is better to have fewer really great employees than throwing people at a problem. Perhaps if we had more employees we might have made different decisions." [email protected]