Study Finds that Nonprofits are Eager for A Cost-Effective Alternative to Group Health Insurance

Great health insurance is necessary for attracting and retaining talent, especially in today’s current economy, where jobs outnumber candidates. However, it’s something a lot of nonprofits struggle to provide for their employees. Nonprofits lack the resources of larger companies and for-profit counterparts. 

A recent study conducted by PeopleKeep found that 81% of nonprofits surveyed said cost was one of the most pressing challenges in finding a health benefit that fits their needs.

Nonprofits also struggle with plan administration with 34% citing they don’t have time to administer traditional health care plans. Nonprofit leaders often wear many hats, switching between strategic initiatives to tactical tasks several times a day. It is rare for smaller nonprofits to have a robust HR team, therefore, the actual administration of health care plans fall on nonprofit directors. 

The study also found that nonprofits have diverse employee populations, and as a result, diverse health needs. Because nonprofits often employ people with a connection to the company’s mission, employees span several demographics, including age, marital status, and insurance status. They may also work across state (or country) lines. This makes finding a group health benefit for nonprofits that delivers value to all employees challenging. In fact, the study shows that 18 percent of nonprofits surveyed said they have never offered a group policy.

Alternative Group Health Insurance Options

There are a few options for small nonprofits that lack the resources and budgets needed to offer competitive health benefits. In fact, some have turned to a relatively new option called the qualified small employer health reimbursement arrangement (QSEHRA). The QSEHRA is a health benefit that allows companies with fewer than 50 full-time employees to reimburse workers for medical expenses. For example, expenses can include premiums for individual health policies. 

Overall, smaller nonprofits seem to be satisfied with the QSEHRA; 93% of nonprofits said they were either very likely or extremely likely to recommend the QSEHRA as a health benefit to other nonprofits. Although nonprofits report high levels of satisfaction with the QSEHRA,

they’re also eager to see more cost-effective alternatives to group health insurance. Plus, there is a big downfall to QSEHRA. It doesn’t apply to companies with more than 50 employees. 

The good news is there is still a cost-effective way to offer nonprofit employees rich group health benefits--regardless of company size. 

At DC Benefits Consulting, we have a unique approach to helping nonprofits save money on their group health insurance costs. We help companies establish an IRS Section 105 Medical Expense Reimbursement Plan (MERP). This plan reduces medical insurance costs by reimbursing employees for medical expenses on a tax free basis. What once used to be an administrative nightmare, the reimbursement process is streamlined thanks to patented technology. So nonprofits not only save money on health insurance plans, but time too!  Plus, A proprietary reinsurance policy insures that there is no risk.

Let Us Help Your Nonprofit Achieve its Mission

When it comes to healthcare solutions for your nonprofit, it’s important to find a key partner who values your mission. At DC Benefits, we help nonprofits offer competitive healthcare benefits to their employees, while saving them an average 18% on healthcare costs every year. Request a free consultation to learn more.