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Nonstop Blog:

How Does Your Organizational Mission Support Employee Healthcare?

nonprofit_employees_working.jpgPhoto: Huffington Post

Nonprofits are, by nature, mission-driven organizations that have goals and values around a commitment to serving specific communities. However, while nonprofits are driven by a singular purpose to support those in need, this can sometimes come at a cost to the employees of these organizations. Nonprofit employees often sacrifice their own needs in terms of compensation and healthcare benefits to work for the organizations they believe in. But at some point, this becomes an issue of equity for these employees in comparison to their for-profit peers.

So the question is: how does your organization’s mission support long term employee health and wellbeing? Do you make decisions that affect employees through the lens of your mission statement or is there another factor driving this process?

This idea becomes especially critical when it comes to employee compensation, specifically healthcare and other crucial benefits that support employees. To determine if your nonprofit is truly living its mission both externally and internally, it’s recommended that you conduct an audit of benefits on a regular basis. Using the foundation of your mission as the primary guide, evaluate the decision-making process from start to finish, keeping a keen eye on each piece as it relates to your values. For health benefits specifically, this means deep diving into your current offerings, re-assessing how – or if – your broker supports your goals, and addressing specific employee needs when it comes to healthcare.

Once this initial audit is complete, there are a number of approaches to health insurance that should be considered in relation to organizational and employee needs/wants. These include:

  • Fully-funded: A health insurance carrier provides all necessary medical and pharmaceutical services for an established premium amount each month
  • Self-funded: Organizations cover the related costs of healthcare independently (without a carrier), assuming all risk and liability
  • Partially self-funded: Organizations purchase less expensive, high-deductible healthcare plans (HDHPs) for employees, and then provide supplementary funds to help pay for out-of-pocket expenses
  • Multiple Employer Welfare Arrangement (MEWA): A group (two or more) of related organizations pool their contributions to provide healthcare for employees.

Determining the best approach to healthcare can be a timely endeavor, but in the long run better understanding your healthcare benefits and choosing a broker who is knowledgeable about both the nonprofit and healthcare industries can be both a time and money saver for your entire business.

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The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purp