Nobody knows a company's financial situation better than the CFO, and most times, they aren't even involved in the process of choosing the right health care plans for their employees. In order to evaluate plans effectively and come up with a well-rounded solution, it's important that all parties (CEO, HR team, and CFO) be involved in the health care purchasing process.
Below are six best practices, from our Downloadable Guide, that nonprofit CFOs should consider as their organization approaches healthcare renewals:
1. TAKE THE LEAD: As a CFO make sure you stay educated by listening to podcasts on employee health care benefit plans, sit in on upcoming broker pitches, and talk to other CFO colleagues about their nonprofit benefits approach. Then, don't be afraid to run the plans you do like by the HR Team and CEO.
2. UNDERSTAND ROLES AND PRIORITIES: Before you start the process of looking into a healthcare plan, make sure you understand all of the different parties' needs. The CEO will likely look at the the impact on administration and operations, while HR is most concerned with how employees will be impacted and the CFO will focus on cost, savings, and risk versus reward. By taking a collaborative approach, all of the bases can be covered before a plan is selected, which will decrease the likelihood of any party being upset.
3. GET CURIOUS: While others within your nonprofit may know the basics of financial management, it is up to the CFO to do the deep and investigative work when it comes to efficiently choosing a financially responsible healthcare program. This means asking tough questions, not just of the healthcare broker but also within your own team.
4. FIND A COMMON GROUND: In our discussions with CFOs, the importance of having strong relationships with your team members was highlighted multiple times. Solidifying a good working relationship with your CEO and/or HR lead will make the healthcare decision-making process much easier. Know your teammates’ personalities and work style, respect their institutional knowledge or fresh perspectives, and understand if they will come at this decision from a more conservative or liberal approach.
5. BE AWARE OF TIMING: The best time to begin re-evaluating your current plan and exploring possible other options is 4-6 months out from renewal. It will take a few months to do all your vetting of potential brokers and plans and to come to a team consensus, and then you will need time to actually implement the new benefits program before enrollment begins.
6. LOOK AT THE WHOLE PICTURE: As your team is making decisions around healthcare, keep in mind the bigger picture of how these choices will impact recruitment and retention efforts, short and long-term savings, and the level of risk versus the level of reward. As one CFO said, “you don’t want situation where HR isn’t happy and the CFO is too narrowly focused on the bottom line.”
This guide provides an overview of the importance of a collaborative approach to purchasing employee health benefits, and strategies CFOs should be implementing when it comes to healthcare renewal season. These include:
• Taking on increasing responsibility for researching cost-effective plans
• Conducting in-depth due diligence on the financial impact employee healthcare has on an organization
• Establishing a healthy, collective viewpoint that considers the effect healthcare decisions have on both the budget and the employees
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 purpose