Should Nonprofits Offer Health Insurance?

Should all nonprofit organizations offer health insurance benefits to their employees? If you are responsible for making this decision for your organization, you understand how challenging it has become.

You’re probably aware of the importance it plays in acquiring and retaining talent and that 87% of the 1.5 million other nonprofit organizations in the U.S. offer some form of health insurance to its employees. However, you may also know that two thirds of the nonprofits have less than 50 employees and only 47% of them offer health insurance.

So, you’ve determined how many employees and dependents would be covered and their benefit preferences, and now you must figure out if your organization can afford it.

Health Insurance Costs

The cost to offer health insurance is clearly a challenge to small nonprofit organizations because employers generally pay about 75% of the premiums (50% is the minimum). And the cost of group health insurance has more than tripled since 2000. In addition, nonprofits with 20 or more employees must provide COBRA coverage to employees who leave the organization.

As a nonprofit with under 50 employees, you’ll want to explore the small business health care tax credit from the federal government as a way to reduce costs. The small business health option program can provide a tax credit of up to 35% of employer paid health insurance premiums.

Employee Retention and Productivity

While health insurance costs may be high, you also realize that attracting and retaining high quality talent is vital to the effectiveness of your mission. As a nonprofit, you are already challenged by this because salaries at nonprofits tend to be a bit lower.

The reasons that the vast majority of nonprofits offer health insurance to their employees are the ability to attract and retain high quality talent, and to achieve higher employee productivity. Surveys show that most employees would rather have better benefits than a higher salary, and most employees say health insurance is the most important benefit in terms of their job satisfaction.

Offering health insurance to your employees keeps them healthy, boosts their morale and reduces employee turnover – which is expensive. The Society for Human Resource Management (SHRM) estimates it costs 6 - 9 months of salary every time an employee is replaced.

Finding the Right Plan

Once it becomes clear that offering health insurance is critical to retain the talent your organization needs to be effective in its mission, you must decide how to go about finding the right plan. This is where we can help.

Most of us at Good Neighbor Insurance have worked abroad or done charitable work ourselves, so we understand your insurance needs as well as anyone. We offer a variety of great insurance plans from top-rated companies with the most affordable rates.

It is our mission to support your mission with comprehensive and affordable travel health insurance. Allow us to serve you and make sure you’re properly covered as you make a positive social impact on the world.