In early 2023, research revealed that half of Canadian workers were contemplating job changes, with 39% seeking improved benefits and perks. This is particularly relevant for the nonprofit sector, where attracting and retaining dedicated staff is crucial, despite often limited budgets. The younger workforce, Gen Z in particular, is advocating for enhanced mental health support, against a backdrop of an aging demographic and rising chronic health issues. Nonprofit organizations must therefore ensure their benefits brokers are equipped to address these contemporary needs.
What benefits matter most to your team?
Nonprofit employees typically value "user benefits" such as massage therapy, physiotherapy, psychological services, vision, and dental care. However, inclusive benefits like fertility treatment support (with the in-vitro fertilization program in British Columbia set for 2025), telemedicine, and drug compatibility tests are becoming increasingly important.
Using tools like employee pulse surveys can offer insights into your team's valuation of these benefits. An adept broker can assist in creating a survey that, while not able to satisfy everyone's desires, can provide a broad understanding of employee needs without skewing expectations. Your benefits package not only contributes to total compensation but also reflects your nonprofit's mission and values.
Nonprofit Tip: Access to benchmarking tools, via select brokers, can ensure your benefits plan is competitive, an essential aspect for nonprofits seeking to maximize resources effectively.
Navigating Insurance Options
In the quest for suitable insurance, nonprofits might lean towards direct contact with insurance companies, yet this route typically redirects them back to brokers, who have expansive access to various rates and providers. This brokerage system is designed to utilize the brokers' expertise in aligning clients with optimal plans. Engaging with multiple brokers is therefore beneficial for nonprofits, as it allows them to receive a range of proposals that can be meticulously compared and contrasted, ensuring alignment with their specific needs, much like obtaining diverse tax strategies from different accountants.
Clear communication about expectations, budget constraints, and organizational specifics is essential when interacting with brokers. This ensures the proposals are not only tailored to the nonprofit's insurance needs but are also financially viable in the long term. Leveraging the expertise of brokers in this way allows nonprofits to navigate the insurance landscape more effectively, ensuring informed decisions that support the organization's goals and sustainability.
Evaluating a Broker's Service
Quality service from a broker is non-negotiable, whether you're revisiting an existing plan or venturing into benefits for the first time. Consider the flexibility of the broker's offerings, including pooled plans, exclusive contracts, and integrated systems. A broker should not only set up plans annually but should specialize in them, understanding the unique challenges and opportunities within the nonprofit sector. It's also beneficial to inquire about their capacity to provide additional services such as access to corporate partners or educational workshops.
Experience-Rated vs. Pooled Insured Plans
In the insurance market, most offerings are experience-rated, meaning the history of claims made by an organization directly impacts its future premium rates. This model can be cost-effective for those with minimal claims but poses a risk for cost variability in the face of unexpected or high claim volumes. Alternatively, pooled insurance plans offer a strategic advantage, especially for organizations that might face fluctuating or higher-than-average claim activities. By merging the claims of a collective group, pooled plans dilute the impact of individual claims on premium costs, promoting rate stability and predictability. This approach can be particularly advantageous for nonprofits that might experience periods of higher claims due to the nature of their work or the demographics of their employees.
Brokers who have a broad spectrum of access to the insurance market can provide invaluable guidance to nonprofits navigating these options. They can assess an organization's specific needs, risk tolerance, and claim history to recommend whether an experience-rated or a pooled plan would be more beneficial. This tailored advice ensures that nonprofits not only secure insurance coverage that aligns with their current needs but also maintain the flexibility to adjust their approach as their organization evolves. The expertise of such brokers in understanding the nuances of both insurance models enables nonprofits to make informed decisions, fostering more strategic long-term financial and operational planning. This guidance is crucial in ensuring that nonprofits can continue to provide for their employees while safeguarding the organization's financial health.
Flex Plan Overview
For nonprofits embarking on the journey of creating their inaugural benefits package, integrating Health-Spending Accounts (HSAs) and Lifestyle Spending Accounts (LSAs) can be a strategic move. HSAs allow employees to allocate pre-tax dollars towards a broad spectrum of medical expenses, from dental treatments to prescription eyewear, providing a tax-efficient method to manage health-related costs. LSAs extend this concept further, offering employees the flexibility to spend on wellness and lifestyle-related expenses such as gym memberships, childcare, or even educational courses, reflecting a holistic approach to employee wellness and personal development.
While HSAs and LSAs offer considerable flexibility, enabling nonprofits to tailor benefits to diverse employee needs without the complexity and cost of traditional insurance plans, they do have limitations. Notably, these accounts are not designed to address catastrophic health events or long-term disabilities that could result in significant financial burdens. Traditional insurance plans, with their broader coverage for such eventualities, including life insurance and long-term disability, act as a critical safety net for employees facing serious health crises. Therefore, while HSAs and LSAs are valuable components of a comprehensive benefits strategy, incorporating elements of traditional insurance ensures a well-rounded approach to employee welfare, safeguarding against a wider array of financial risks and uncertainties.
Nonprofit Insight: HSAs, which do not attract payroll or employer health taxes, can supplement a traditional insurance plan, offering a tax-efficient benefits enhancement.
2024 Benefits Plan Trends and Considerations
Nonprofit organizations often engage in work that is not only deeply rewarding but also emotionally demanding. Recognizing the mental and emotional toll such work can take, prioritizing employee mental health is not just beneficial, it's essential. This is where Employee Assistance Programs (EAPs) become invaluable. EAPs provide a confidential, accessible suite of services designed to support employees through various challenges—be it stress, anxiety, depression, or personal issues. These programs can offer counseling, crisis intervention, and referrals to mental health professionals, among other support services, playing a pivotal role in maintaining a healthy, resilient workforce.
Furthermore, the administrative aspect of managing benefits can be a significant undertaking, especially for nonprofits operating with limited staff and resources. Integrating benefits administration with payroll systems offers a streamlined, efficient solution. This integration simplifies the process, reducing administrative burdens and freeing up valuable time and resources that can be redirected towards the organization's core mission. Additionally, the healthcare landscape in Canada is evolving, presenting new opportunities for nonprofits to manage benefits costs effectively. The shift towards biosimilar drugs, which are less expensive alternatives to biologic drugs without compromising on quality or efficacy, can significantly reduce healthcare spending. Moreover, the introduction of the Canadian Dental Care Plan, aimed at providing dental care to those without existing benefits, offers another avenue for nonprofits to support their employees' health needs while managing costs. Together, these developments allow nonprofits to explore innovative strategies for enhancing their benefits offerings, ensuring they can provide comprehensive support to their teams in a cost-effective manner.
