Health insurance remains one of the most commonly offered employee benefits, even among nonprofit organizations.
Successful nonprofits understand that offering benefits, including healthcare coverage, can attract talent, increase productivity, boost morale and help build a positive company culture.
Although the advantages of offering health insurance to employees are irrefutable, many nonprofit organizations struggle to fit coverage into their budget.
According to a Kaiser Family Foundation survey, the average percent of health insurance paid by employers is 70 percent for family coverage and 82 percent for single coverage.
How To Budget For Health Insurance As A Nonprofit
While paying for employer-sponsored health insurance may seem like a daunting task, nonprofits can typically fit this expense in their budget with some preparation.
Here are some of the best ways for nonprofit organizations to budget for healthcare insurance and actually save money.
Understand Employee Needs
One of the most advisable things a nonprofit can do when budgeting for health insurance is to get feedback from employees.
It is important to know what is valuable to workers in terms of medical, dental and vision coverage. Employees also want reassurance that their employer cares about their opinion and healthcare needs.
Some businesses may discover that they only need a basic policy and those extra savings can be enjoyed by employees in their paychecks.
Cut Costs Elsewhere
If there is little to no room in the current budget for a healthcare plan, consider restructuring costs in other areas. Conduct a thorough analysis of where every dollar is going in order to determine what areas that may be cut or even eliminated.
Most businesses will find that there is room in the budget to easily save money, such as replacing costly business travel costs with video conferencing. This extra funding can then be allocated to health insurance coverage for employees.
Shop Around For Coverage
Nonprofits are not limited to a single health insurance plan; there are many insurers that offer health insurance for nonprofit organizations and each is unique in their terms and rates.
Shop around and request quotes from several insurers before making a decision.
When comparing plans, consider the type of health plan that will best benefit employees.
Many workers enjoy EPOs since referrals are not required with this plan; however, HMOs tend to be more cost-effective and are often available at a fixed rate.
Consider An HSA
A health savings account (HSA) can be an excellent option for nonprofits who want lower insurance premiums, FICA savings, low annual premium increases and improved employee retention.
With an HSA, employers are set up to pay their own health care expenses. These long-term accounts can only be used with certain HSA-compatible insurance plans which have a low monthly premium and high annual deductible.
They can be used to save on premium contributions from employers while enabling employees to retain health coverage.
Match Plans With Employee Health & Lifestyles
Not all health insurance plans are suitable for every business. For example, a nonprofit that has mostly healthy employees that do not need to visit the doctor often can save money by choosing a low premium, high deductible plan.
In comparison, a nonprofit with employees that have chronic health problems can typically save money by choosing a high premium, low deductible plan.
Consider the health and lifestyle of the employees and fill in coverage gaps with other benefits, such as telemedicine, wellness rewards, free annual physicals, low-cost prescriptions and access to service experts.
Flexible spending accounts (FSAs) can be invaluable to employees that encounter unexpected healthcare problems. With an FSA, employees set aside funds to pay for their health care needs; this money is generally put into an account pre-tax from their paycheck.
Employees then have control over when they spend the money and what health care bills are paid from the account. Employees also have the option to opt out of contributing to an FSA during the open enrollment period.
Encourage Virtual Care Solutions
Telemedicine has become more popular now due to stricter healthcare regulations. Many health plans now include a variety of virtual care solutions, including the telemedicine option.
These services are often offered at a low price or no additional cost since it is less costly to meet with a provider over a phone or video compared to a traditional in-person session. Telemedicine is an excellent way to save money on routine medical issues, such as colds, pink eye, rashes and UTIs.
Introduce A Wellness Plan
A wellness plan is a type of plan intended to promote or improve health and fitness. These types of plans are often offered to employees through their workplace, although some insurance plans offer them directly to enrollees.
Wellness programs may offer a variety of perks to employees, such as cash rewards, premium discounts, gym memberships, weight loss programs and other incentives.
Wellness programs aim to help employees stay healthy which improves productivity in the workplace and reduces the need to see a doctor.
Are Nonprofits Required To Offer Health Insurance?
Nonprofit organizations are not legally required to provide health insurance. However, they may face a penalty under the Affordable Care Act (ACA) for failure to offer coverage.
Businesses with 50 or more full-time employees are obligated to provide employees with a minimum level of insurance coverage.
The ACA does not require employers to provide health insurance coverage to part-time employees.
Nonprofits are also not required to purchase health insurance through the Marketplace but may be eligible to purchase insurance through state-specific “SHOP” programs.
Speak with A Benefits Consultant Today
Nonprofit organizations often operate on a tight budget, leaving a small margin for extras such as health insurance plans. The advantages of offering health insurance to employees typically outweigh the cost in the long term.
Not only does health insurance help reduce employee illnesses and injuries, but it can also help maintain a happy and productive workplace.
To learn more about the ways in which nonprofits can budget for health insurance or to speak with an experienced benefits consultant about acquiring health insurance, reach out to the professionals at Business Benefits Group today.