nonprofit providing services of value health to their employees. For many nonprofits, however, a traditional health plan group can not be profitable for employees or for the organization. A strategy defined contribution paired with individual health insurance offers an alternative to traditional health insurance plans. This strategy is gaining popularity with nonprofit organizations because it offers a way to provide employees with excellent health benefits without incurring the cost or risk associated with traditional health insurance.
Why Nonprofits want to offer health insurance, but struggle to do so
small nonprofits face unique challenges in hiring and retaining employees. With limited resources, management teams must be strategic about how to allocate salaries and benefits dollars.
Regarding health benefits, cost control has become a major challenge. Over the last fifteen years, the national average cost to cover an employee with group health insurance increased by 174 percent. . This represents an average of 12 percent annually (Kaiser Family Foundation, 2014)
The Department of Health and Human Services Agency estimates that there were more than 500,000 non-profit employers to United States in 2013. of these non-profit organizations:
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Nearly half have fewer than 10 employees and two-thirds had fewer than 50 employees.
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Only 47% with fewer than 50 employees offer coverage of health insurance employees.
Small non-profit organizations have been particularly affected, as the increase in premium costs and declining coverage was strongly felt by the organization and employees as well.
New health insurance options for charities
employees accordingly, without educated profit turn to the individual health insurance and reimbursement of premiums "employees, or part of premiums, through a defined contribution health plan. Defined contribution (aka individual repayment of health insurance) offers nonprofit sometimes new - flexible, controlled economic, and health benefits durable employees. The concept is simple:
- Cancel the group health insurance plan (if offered)
- Set the amount the organization can afford health benefits (not minimum quantities or maximum contribution) ..
- Defined contribution use software to give each employee a fixed amount to use on personal health insurance.
- provide employees with information and resources on where and how to choose their own health insurance policy.
Then employees purchase their own individual / family policies, and to choose how to spend their health care allowance. Eligible employees can use their allowance to buy policies subsidized by the health insurance market.
A defined contribution approach is an affordable alternative to a group health insurance plan sponsored by the employer. As you can see, the defined contribution plans themselves are not insurance plans. Rather, they are an affordable way to provide benefits to the health of employees.
Control & Fiscal Predictability
A non-profit because offer a defined contribution health plan is that it gives the organization full control of costs and the design of the benefit, allowing a nonprofit to meet their budget and provide predictability board. For example, the organization decides:
- Amount of insurance benefits, and the ability to design different amounts of the allowance per employee category (ex: $ 250 / month administrators and $ 125 / month for case workers)
- employee eligibility criteria (eg :. a waiting period for new employees or eligibility based on hours worked per week)
- employee cost-sharing options (eg :. reimburse employees 80 percent of the premium cost, up to the amount of their balance).
to learn more, download this free PDF guide for nonprofit organizations.
Conclusion
for small non-profit organizations, defined contribution (reimbursement of individual health insurance) is an emerging way to offer employees assessed health benefits.
With individual health insurance, employees choose the plan that best fits their needs, including the doctor, keep the plan for as long as they want, and save money .
With a rebate program, the association affordable flexibility program of health benefits that help recruit and retain the best employees.
Consequently, many nonprofits are seeing savings of 20 to 60 percent on the cost of health care.
What questions do you have about insurance nonprofit disease or individuals reimbursement from health insurance? Download this free guide or leave a comment below. 
Editor's Note: This post was updated with the latest information Insurance disease. The article was originally published in April 2013.
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