defined contribution is a popular health insurance solution for small and medium 
nonprofits size. This article examines why organizations are rapidly adopting defined contribution as a health insurance solution nonprofit
s Note 'editor:. This post has been updated with information on the most common health insurance. The article was published in May 2014.
Overview of Medicare nonprofit
The traditional way for nonprofit organizations to offer of health benefits is a group insurance plan. With this approach, purchasing and the organization manages and political costs are generally shared between the employer and the employee. Coverage can also be extended to dependents. There are several types of health insurance plans available such as BPP, HMO, etc.
However, many non-profit organizations of small and medium businesses can not afford a traditional group health insurance coverage because of rising costs and the minimum contribution and participation requirements prohibitive. Which is why many non-profit organizations, charities and churches adopt individual health insurance with a defined contribution health plan.
Overview of defined contribution for nonprofits
With individual health insurance and a defined contribution employer, the association provides for reimbursement in respect of costs individuals employee health insurance. Because non-profit groups and control the contribution, the association is able to name its price for the health benefits.
Using a repayment plan of formal and consistent premium, the association establishes provisions of Medicare that all full benefits. Employees purchase and manage an individual policy of their choice, often with the help of an insurance broker disease, and are reimbursed the plan allows
Related -. How Works premium refund for nonprofits
Why defined contribution is popular with non-profit organizations
The main reason nonprofit adopt defined contribution is to achieve cost savings and fiscal control. Defined contribution allows the nonprofit to control all health benefit costs. This feature alone enables many non-profit organizations to provide health benefits for the first time
In addition, there are other benefits to defined contributions which correspond with the organizations objectives Nonprofit:.
Controllable costs - nonprofit Patches their cost because they decide how much to contribute. There is no minimum contribution requirements, and non-profit can vary employee contributions based on employment criteria. For nonprofits, with predictable and controllable costs year to year adds much needed stability to the budget and allows to report to the Board and donors.
More Time for Work Meaningful - With the defined contribution program, nonprofit organizations have a tool to provide health benefits in less than 5 minutes month. No calls with the insurance company. No renewal. No dispute claim. With lean staffing nonprofit, simple administration is a great advantage
For employees, the main benefits are defined contribution :.
Reduced costs - In the workforce today, it is not just the employer who pays part of the cost of the premium - as employees (especially for family coverage). In today's market, individual health plans cost up to 60 percent less than traditional group plan and eligible employees can access federal tax credits to reduce their costs of premiums even more
Choice Plan . - With their allocation defined contribution each employee can choose the health plan that best suits their individual needs. This can be a plan of any insurance company and any kind of plan coverage (franchises, network, etc.). Employees can keep their doctor and preferred medical centers. The plan is portable and keep them if they leave the organization.
Conclusion
As traditional insurance group health becomes more expensive and less attractive to the teams and leadership of employees, nonprofits assess individual health insurance and diet defined contribution plans.
Additional Resources
- A Guide nonprofit benefits
- 3 Questions Every nonprofit should ask before choosing health insurance
- How Medicare reimbursement individual work for charities
What questions do you have about this non-profit health insurance solution? Leave a comment below and we'll help you answer!
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