Photo: Leblanc Law and Mediation
A recent CFO survey by Integrated Benefits Institute (IBI) highlights the importance of CFO involvement in employee healthcare decisions. While cost control tops the list of CFO goals around healthcare at 44%, other top-of-mind goals include recruitment and retention (36% rank this as the most important goal), helping employees make smarter healthcare choices, and increasing worker productivity. Of those surveyed, 43% say they are equal partners with their HR department in making healthcare decisions.
Where organizations place their importance can dictate how they approach healthcare. For example, companies that place more emphasis on healthcare as a recruitment or retention tool may be less likely to implement cost-shifting strategies. Those that value employee health as a key goal may be more apt to offer wellness programs to encourage smarter healthcare choices (ideally leading to more productivity). And while CFOs often have a reputation for being solely focused on ROI, the IBI survey shows a surprisingly low number of organizations that actually implement any outcome measurements (23%), possibly because traditional ROI doesn’t always measure what organizations are trying to accomplish with employee healthcare (e.g. retention of qualified staff; employee wellness and productivity).
For nonprofits especially, a partnership between financial managers and HR departments becomes even more important because of the tight management of overhead budgets. Determining how to offer an employee healthcare plan that is ACA compliant, doesn’t disrupt the bottom line, and aids in recruitment and retention efforts is a delicate dance between all stakeholders. Often times, small-to-midsize nonprofits need to choose between quality, affordable staff healthcare, or program development for community outreach. One side wins out while the other sides suffer.
However, there are options that can appease both HR and CFO goals, and allow a true partnership between the two departments. Partial self-insurance is one such alternative, and allows nonprofits to marry a high deductible health plan (HDHP) with a reserve fund to cover employee out-of-pocket costs. The end result is significant organizational savings, improved employee benefits, and reduced employee expenses. The budget is protected and recruitment and retention efforts are boosted – a win-win for both CFOs and HR managers.
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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 purpose