Employee health benefits for nonprofit organizations

Why offer nonprofit employee benefits?

Employee benefits and perks are beneficial to employees in every sector. But, offering employees perks as a nonprofit will have a significant positive impact on your organization.

Let's look at three key benefits of offering nonprofit employee benefits.

Tax advantages

Several health benefits provide tax advantages for both your organization and employees. 

Examples of tax-free employee benefits include:

• Healthcare reimbursement through an HRA
• Group health insurance premiums (pre-tax deductions)
• Cafeteria plans, like health savings accounts (HSAs)

Satisfy federal and state benefits requirements

The federal government has certain benefits regulations that apply to nonprofit and for-profit organizations alike. The Affordable Care Act (ACA) requires organizations with 50 or more full-time equivalent employees (FTEs) to provide health insurance that meets minimum essential coverage (MEC) and minimum value (MV) criteria to at least 95% of full. This requirement is known as the employer mandate.

Employers with 50 or more FTEs, referred to as applicable large employers (ALEs), may face tax penalties if both conditions are met:

• They don't provide health insurance coverage to at least 95% of their full-time employees and their dependents.
• Any of those employees get subsidies on the individual health insurance market.

Other laws require employers with 50 or more employees to provide family and medical leave to employees who have been employed for at least a year. You'll need to ensure your organization remains compliant with the law while offering benefits your employees value.

What health benefits should nonprofits offer employees?

There are a variety of benefits options available to nonprofits. Traditionally, employees have grown to expect employers to offer group health insurance. But, for nonprofits with tight budgets or small teams, this may not seem possible. Thankfully, there are alternative medical benefits solutions for nonprofits.

A health reimbursement arrangement (HRA) allows employers to reimburse their employees tax-free for more than 200 types of eligible medical expenses, such as individual insurance premiums.

You can reimburse a wide range of HRA-eligible expenses, including:

• Monthly premiums for individual health, vision, and dental plans
• Preventive care
• Emergency care
• Prescription drugs
• Over-the-counter medication
• Mental health counseling

With an HRA, employers choose an allowance cap for employees to use each month, giving nonprofits cost control over their benefits.

With an HRA, your employees can get reimbursed for the qualifying medical expenses that matter most to them. ICHRAs and QSEHRAs also enable your workers to purchase the individual health plans that work best for them instead of relying on a one-size-fits-all group policy.

How do you manage personalized employee health benefits?

Running a nonprofit organization can be administratively demanding, with many employees wearing multiple hats. With massive amounts of records, regulations, and timelines to keep up with, adding benefits to these obligations can be daunting.

Many organizations turn to third-party benefits administrators or administration software to easily manage their benefits.

However, offering HRAs through PeopleKeep's benefits administration software doesn't add more to a small firm's burden. Both you and your employees can set up and administer affordable employee benefits in just minutes each month. With PeopleKeep by Remodel Health, our experts review your employees’ reimbursement claims and documentation for you. This ensures compliance with federal law while saving you time.