How to Offer Great Non-Profit Benefits Packages to Your Employees
As it is with for-profit organizations, nonprofits can retain the best talents on their teams by providing their employees with competitive non-profit benefits packages. No doubt, compensation is directly related to the level of morale your team has, and if it is poor, you may not only lose your best talents, but you’ll also find that those who stayed may not be putting in their best at work.
That said, if you’re looking to offer great benefits to workers in your non-profit, this post contains some tips to help you make the best choice. Read on to learn why nonprofits need to offer great employee benefits to their workers, how the Affordable Care Act (ACA) affects nonprofits offering benefits packages, and how to go about selecting the best employee benefits.
Why Nonprofits Should Offer Employee Benefits
The most inspiring reason you should consider offering employee benefits to your workers is that it reflects what you stand for as an organization. Every nonprofit organization in the world sets out to make the world a safer, more peaceful, and better place to live in. It only makes sense that your employees are also enjoying the same legacy you're spreading in your local community and around the world.
Secondly, the average cost of replacing an employee is high. This means that if an employee leaves, it will not only affect your work, but you might end up spending beyond your budget to replace the employee. And one of the best ways to ensure your employees remain with you for the long haul is to offer them great employee benefits. Besides, their take-home may not even be so great (which is typical of many nonprofit organizations), making it necessary to provide them with better benefits.
Here are some of the common and important employee benefits you need to consider for your nonprofit workers:
Vacation and paid time off
Paid sick days
401(k) or retirement plan
Benefits like healthcare, free gym membership, paid time off, paternity and maternity leaves, etc., can boost employee morale and even help them achieve better work-life balance.
The Affordable Care Act
Just like for-profit organizations, nonprofits are now bound by the Affordable Care Act when it comes to employee benefits. However, you need to know the details on this to help you make the right decisions. On federal, state, and local levels, specific regulations exist, which every nonprofit needs to stay aware of.
Here are important ACA legislation that affects nonprofits operating in the United States need to observe:
Nonprofit with Fewer than 50 FTEs
If your nonprofit has fewer than 50 full-time equivalent employees (FTEs), the ACA does not require you to offer healthcare benefits. However, nonprofits that belong to this category who offer employee benefits receive an incentive for doing so.
For instance, your company may be eligible for the Small Business Health Care Tax Credit if you have fewer than 25 FTEs and pay average annual wages to your employees for the year of less than $50,000 per FTE. Also, you may be eligible if you cover at least 50% of your FTEs health insurance costs.
Normally, a full-time employee (FTE) works at least 30 hours weekly, or 130 hours per month. But also keep in mind that your part-time employees (PTEs) can work the same amount of time as FTEs, which makes keeping track of the hours each employee works very important.
Nonprofits with 50 or More FTEs
If on average, you have 50 or more full-time equivalent employees working for you, then you must provide your full-time workers ACA-compliant healthcare coverage, as provided in the ACA. This means that you must provide medical insurance coverage to your employees or risk paying a penalty.
For federal government minimum healthcare coverage, you must meet certain standards. You can check here for more details on the 2017 Affordable Care Act. Other required benefits to be aware of include unemployment insurance, workers’ compensation, paid sick leave. You may want to confirm from your state or county to determine what is obtainable and what is not.
How to Find the Best Nonprofit Benefit Package for Your Organization
There are a number of good options and alternatives that you can try. You can check out the following options:
Buying insurance premiums directly from insurance companies is typically suitable for people buying individual packages, meaning that companies buying for lots of employees may have to spend more with this option. Direct purchase is mostly intended for people who are buying insurance individually. Besides, employees might have to pick out the plans they want individually then check with the company to know if they can help them afford the plan. This plan may not only be confusing for management to handle, but employees may have to pay with post-tax earnings.
Companies with 50 or fewer FTEs — including nonprofits — are eligible for the Small Business Health Options Program (SHOP) Marketplace offers. While a nonprofit is not required to purchase insurance for employees through the SHOP Marketplace, you might be able to save on health insurance if you have fewer than 50 FTEs in your company.
Professional Employer Organizations
Unlike going through regular insurance brokers, where you may be priced out of group insurance, PEOs offer group rates that make employee benefits quite affordable to employers. And this applies across the board, whether you are a nonprofit or a for-profit company. PEOs generally group small businesses together to obtain enterprise-level benefits.
PEOs offer you a wide variety of benefits for less. From affordable healthcare premiums to 401(k) plans, life insurance policies, paid time off, family leave, and workers’ compensation, PEOs allow you to enjoy premium benefits while saving the trouble and cost involved. This is because PEOs are in contact with many insurance carriers, many of whom you may not be able to negotiate with on your own. Besides, there are many more benefits of working with a PEO.
Check out our post on how working with a PEO can save you money and help your nonprofit offer competitive benefits to your employees.
Need Further Assistance with the Best Nonprofits Benefits Packages?
Feel free to reach out to us today at Mission to learn more about the cost of hiring a PEO and selecting the best PEO. At the Mission, we usually recommend that our clients work with certified PEOs or PEOs that have a longstanding reputation for excellence. Working with a certified PEO company shields you from errors and liabilities that may arise as a result of the negligence, actions, or inactions of the PEO. Besides that, you’ll typically have access to a fuller range of benefits with a larger, more established PEO.
At Mission HR, we do not only offer your business the services and solutions you need to scale your business quickly and efficiently. We also bring our years of experience and rich insight to the table, providing businesses with answers to all their bugging HR and outsourcing needs.