BY MICHAEL BARTLETT
JAN 6, 2014 12:01am ET

http://www.cujournal.com/news/cus-will-turn-to-operations-to-save-money-in-2014-1021909-1.html?zkPrintable=1&nopagination=1

LAS VEGAS — The outlook for credit unions in 2014 is generally positive, according to industry insiders and analysts.

Dr. Brandi Stankovic, partner at credit union consultancy Mitchell, Stankovic & Associates, predicts "optimism" in the community as credit unions are starting to see growth.

"The numbers were pretty strong in 2013 and they project well in 2014," she said. "A lot of credit unions have turned the corner with their net worth ratios, meaning regulators are not leaving enormous checklists."

This improvement should have a profound effect on day-to-day operations at credit unions, Stankovic continued, as management wants to focus on sustaining positive momentum. She said the teams running credit unions will be examining the "bench strength" in their respective institutions. If the financials are good, she predicted, there will be dollars to invest back in to operations.

"This allows retention and engagement of the staff, putting some dollars into recruiting efforts," she said. "In a related development, credit unions are doing more with social responsibility. They do not think the crisis is completely over, but they do see the smoke is clearing. People have more optimism. They are doing team-building exercises that get staffers involved in the community, such as work at Children's Miracle Network Hospitals."

HR Will Be Busy

Healthcare will be "the big issue" of credit union operations due to all the changes in insurance due to the introduction of the Affordable Healthcare Act, also known as Obamacare. Stankovic noted healthcare benefits used to be a differentiator for credit unions-CUs were considered "special" because they offered such great benefits.

"Now, there is a gap in the industry," she said. "Healthcare has become so complex, and no one knows what it is going to look like in the next few years, benefit advocacy is not where it used to be."

The healthcare budget line item probably is going to increase, Stankovic predicted, meaning credit unions will have to reexamine and get creative.

She suggested that credit unions might have to implement proactive wellness programs, such as those involving yoga or exercise.

"A lot of credit unions are ready for 2014, but the individual mandate is causing credit unions to investigate 2015," she said. "Most credit unions cover staffers 100%, and some even cover their families. But the cost may be going up. The so-called 'Cadillac' programs will come with a 40% excise tax in 2018, meaning a company that spends too much on healthcare will be penalized."