Employee benefits for nonprofit organizations
Learn how nonprofit organizations can increase employee satisfaction and reduce turnover with employee benefits.
Need help designing a benefit that works for your nonprofit organization? Schedule a consultation with a personalized benefits advisor.
Looking to provide benefits to your employees as a nonprofit?
With the cost of healthcare and health insurance rising every year, many nonprofit organizations wonder how they can offer competitive benefits to employees without stretching their tight budgets.
This guide will explain why your nonprofit should offer employee benefits, which benefits are available, and what solutions can help you manage these benefits.
Topics covered in this guide include:
Why offer nonprofit employee benefits?
While employee benefits and perks are beneficial to employees in every sector, there are significant advantages to offering your employees perks as a nonprofit.
Hire and keep top workers
With five generations in the workplace, each with their unique needs, offering a competitive benefits package that works for everyone is crucial. When all of your employees feel supported and appreciated through their benefits, they’re more likely to have high job satisfaction and see your organization as an employer of choice.
In a job seeker’s market, employee retention is vital, especially for nonprofit organizations that have a harder time competing against large corporations with bigger budgets. Offering competitive benefits helps your organization retain employees so that you don’t lose your top workers to for-profit companies.
Satisfy federal and state benefits requirements
The Affordable Care Act (ACA) employer mandate requires organizations, including nonprofits, with 50 or more full-time equivalent employees (FTEs) to provide health insurance that meets minimum essential coverage (MEC).
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.
Why offer personalized benefits?
While traditional benefits, such as retirement and insurance benefits, are excellent options for any organization, personalized benefits are often a better choice for nonprofit organizations.
Personalized benefits are a type of perk where you provide employees with a monthly allowance through a benefits expense card or account or reimburse them for their eligible expenses.
When you provide a personalized benefit to your employees, you empower them to use their benefits the way they want to. This allows you to best serve their individual needs, giving you a competitive advantage when hiring new talent.
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 medical expenses such as insurance premiums and qualified expenses. With an HRA, employers choose an allowance cap for employees to use each month, giving nonprofits cost control over their benefits.
Three of the most popular types of HRAs are:
- Qualified small employer HRA (QSEHRA)
- Individual coverage HRA (ICHRA)
- Group coverage HRA (GCHRA), also known as an integrated HRA
With an HRA, your employees can get reimbursed for the qualifying medical expenses that matter most to them. QSEHRAs and ICHRAs 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 employee benefits?
Running a nonprofit organization can be administratively demanding, with many employees wearing multiple hats. With massive amounts of records, regulations, and timelines to stay on top of, 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 employee benefits in just minutes each month.
Our platform has helped thousands of employers reimburse employees for health expenses.
Frequently asked questions about nonprofit employee benefits
How are employee benefits different for nonprofits?
Many people have a misconception that nonprofits don’t provide their employees benefits and instead rely on volunteers. This isn’t the case for many nonprofits. Nonprofit employers offer benefits to their employees much like any business would. However, nonprofits tend to have tighter budgets. This makes choosing the right benefits critical.
See our nonprofit’s checklist for choosing health insurance for your employees
Does the Affordable Care Act (ACA) require nonprofits to offer benefits?
The ACA’s employer mandate requires all organizations with 50 or more full-time equivalent employees (FTEs) to offer medical coverage. This could be a group health insurance policy or an ICHRA if your employees have individual health insurance that meets minimum essential coverage (MEC).
Nonprofits with fewer than 50 FTEs don’t need to provide benefits by law. However, it is still a great way to attract and retain employees.
Is a nonprofit required to purchase health insurance through the marketplace?
No, nonprofits aren’t required to provide health insurance through the marketplace. However, nonprofits with 50 or more FTEs are required to provide health coverage. This can be through an ICHRA instead of group health insurance, where your employees purchase their own health insurance that meets MEC and get reimbursed for their premiums.
What can be included in my nonprofit employee benefits package?
Your compensation packages can consist of nearly all types of benefits, including health benefits, employee stipends, paid time off, sick leave, retirement plans, and more.
Learn how PeopleKeep can help you
Wondering how you can design an affordable and hassle-free personalized benefits package for your nonprofit organization? Learn how PeopleKeep can make offering individualized benefits possible.