The rising cost of healthcare is causing nonprofit organizations to face large challenges compared to for-profit businesses. Amid maintaining and gaining sponsorships, balancing partnerships, growing the impact of your businesses, and hiring talented and passionate workers, employers are strategizing how to better serve their employees.
Should your nonprofit offer health insurance? If so, how can you do so in a way that is effective and affordable?
Benefits of Healthcare at Your Nonprofit
Yes, your nonprofit should offer healthcare. Any attractive benefits package for small business employees includes medical coverage. Healthcare is a way to increase productivity and minimize absenteeism. By offering health insurance, you are also:
- Demonstrating that you’re invested in your employees. The benefits employees receive from their employer are directly linked to their perception of your company values. If you invest in their health, they will naturally feel more valued.
- Maintaining company morale. Positivity is key. Happier, healthier employees result in a more productive working environment and greater camaraderie.
- Recruiting (and retaining) talented employees. To hire competitively, a company must offer attractive benefits — especially when salary or wage offerings are limited.
- Participating in a tax-free way to boost compensation. A comprehensive healthcare package may be more attractive to some employees than a higher annual salary.
Affording Group Insurance for Your Employees
Yes, you can afford healthcare for your employees. First, determine how much cost-sharing you can afford. By law, you are required to contribute at least 50 percent. On average, employers paid 76 percent of healthcare costs. Consider the following options to cut costs and ensure your group health plan is affordable for you and your employees.
Assess the Needs at your Nonprofit
In order to make the best choice for you and your business, understand the needs and priorities of all parties. Create a company survey or host a company-wide meeting to create conversations and determine what kind of coverage is most valued. Three key questions to ask include:
- Who will be covered? Determine first how many employees are interested in joining your plan and how many are already covered by their spouse or another family member. Of those interested in a group health plan, how many are seeking coverage for only themselves? And how many have dependents?
- What type of plan do your employees prefer? Plans with a lower monthly premium are often paired with a higher annual deductible, while higher premium plans often include a lower deductible. If your employees don’t visit the doctor often, perhaps a higher deductible plan is a better option (and vice versa).
- What benefits are important to your employees? Without asking your employees about their personal or family medical history, determine which benefits are most important to them — catastrophic coverage, low copayments, vision or dental care, etc.
Small Business Health Care Tax Credit
If your business has fewer than 50 FTE employees, the Affordable Care Act (ACA) does not require you to offer health insurance; however, there is an incentive to do so. Nonprofits may be eligible for a tax credit up to 35 percent, depending on the number of employees and their average annual wage. Full credit is awarded to employers with 10 or fewer employees who earn less than $25,000 per year (on average). As the number of employees and the average salary increase, the tax credit wanes.
Save Money by Retaining Employees
Consider the cultural and financial impact of replacing an employee. From lost productivity and engagement to the time and materials invested into proper training, it’s in your best interest to retain employees at your nonprofit. The Society for Human Resource Management (SHRM) estimates it to cost 6-9 months’ salary every time an employee is replaced. By offering an attractive benefits package that includes comprehensive healthcare, employees are more likely to stay.
Consider a High Deductible Plan
A high deductible plan is a more affordable option for employers that incentivizes employees to seek value-based care, which is becoming more obtainable as healthcare progresses with telemedicine options and lower-cost treatment clinics.
Once your business decides on a plan that fits everyone’s needs, ensure your employees understand how it works. Your business and your employees are invited to contact Canopy Health with any questions about in-network providers, claims, and service options.
Canopy Health Is on Your Side
Offering healthcare at your nonprofit is a unique challenge. We make it easy by offering customizable healthcare plan designs, personalized service and assistance, and an incredible integrated network of alliance partners, including UCSF Health, John Muir Health, and Hill Physicians Medical Group, among others. We provide thousands of conveniently located in-network primary care physicians and specialists and dozens of hospitals and urgent care centers across seven counties in the Bay Area.
Top 10 Healthcare Planning Considerations for Small Businesses. (2012, July 2). Forbes. Retrieved from https://www.forbes.com/sites/thesba/2012/07/02/top-10-healthcare-planning-considerations-for-small-business/#203f636220f3
Mercer National Health Survey: Employers Finding New Ways to Hold the Line on Health Benefit Cost Growth. (2017, November 2). Mercer. Retrieved from https://www.mercer.com/newsroom/mercer-national-health-survey-employers-finding-new-ways-to-hold-the-line-on-health-benefit-cost-growth.html
Merhar, C. 3 Questions Every Nonprofit Should Ask Before Choosing Health Insurance. (2016, March 31). Zane Benefits. https://www.zanebenefits.com/blog/bid/325440/3-questions-every-nonprofit-should-ask-before-choosing-health-insurance