Customer case study: Nonprofit Megaphone

The challenge

As a small remote company, Nonprofit Megaphone initially didn’t offer a health benefit. But as the company became more successful, it hired enough employees to qualify as an applicable large employer (ALE). Under the Affordable Care Act’s (ACA’s) employer mandate, ALEs must offer full-time employees and their dependents affordable health insurance that provides minimum essential coverage (MEC) and minimum value, or face a tax penalty. 

Nonprofit Megaphone knew it had to implement a health benefit to stay compliant and satisfy its employees. However, many of its employees already had health insurance coverage. Several staff members were military spouses with TRICARE plans, others had coverage through their spouse’s group health plan, some participated in a healthcare sharing ministry, and a few had individual health insurance coverage. 

With so many employees already enrolled in various types of plans, finding a health benefit that would work for all its employees and satisfy the ACA’s employer mandate was challenging. 

The solution

Nonprofit Megaphone CEO Grant Hensel initially looked into group health insurance with various brokers. However, the participation requirements that came with group plans were unattainable for the company, so Grant decided to look online for alternative options. Almost immediately, he found PeopleKeep. 

After working with a personalized benefits advisor, Grant learned about the individual coverage health reimbursement arrangement (ICHRA). The ICHRA would allow him to reimburse his employees for individual health insurance premiums and more than 200 qualified out-of-pocket expenses. It also allowed them to create an ACA-compliant group health plan.

Nonprofit Megaphone decided to offer an ICHRA with a $400 monthly allowance so that employees with individual health insurance plans would have most of their insurance premium expenses covered. Because of the ICHRA’s flexibility, the organization was able to provide more personalization than it could with other health benefit options.

However, not all health plans are ICHRA-compliant. Employees covered by group health plans (including a spouse's plan), COBRA, healthcare sharing ministries, association health plans, and TRICARE couldn’t participate in the ICHRA. So after two years of providing an ICHRA as its only health benefit, Nonprofit Megaphone decided to add a flexible health stipend to its benefits package. 

With the addition of a stipend and an ICHRA, Nonprofit Megaphone could offer its employees money for various expenses. Because taxable stipends had fewer restrictions on eligible expenses than HRAs, all employees could participate in the program—regardless of their chosen health insurance plan. Once Nonprofit Megaphone decided to proceed with one, Grant created a health stipend with a $300 monthly allowance for all employees. 

The results

The onboarding processes for the ICHRA ran smoothly. PeopleKeep’s customer support team was quick and helpful and assisted the company’s benefit administrators with any questions or concerns. 

Since implementing the ICHRA, job satisfaction and morale have increased at Nonprofit Megaphone. Employees appreciate the flexible benefits and feel like leadership met their request for comprehensive health benefits. Not only has this resulted in more engaged and productive employees, but it has also helped Nonprofit Megaphone create a company culture that values employee well-being and development.

Attracting and retaining workers at Nonprofit Megaphone is also stronger than ever. Having an ICHRA shows the company is attentive to individual preferences, which has helped the company retain its current employees while capturing the attention of high-caliber candidates.

On average, it takes Nonprofit Megaphone’s bookkeeper fewer than 30 minutes each month to administer both benefits. Using PeopleKeep’s intuitive user interface for ICHRA, she can log in, update employment information, and schedule reimbursements with a few clicks of a button. 

Together, the ICHRA and stipend benefits have been the right solutions for Nonprofit Megaphone. Thanks to the tax-advantaged ICHRA, Nonprofit Megaphone saves on payroll taxes and estimates its annual savings will reach tens of thousands of dollars. With these savings, Nonprofit Megaphone intends to allocate more generous allowance amounts to its ICHRA and stipend benefits in the future.