Health benefits for nonprofit organizations

Download our guide: The nonprofit's guide to health benefits

In 2019, nonprofit organizations employed the third most employees in the nation, following only retail and food services (2019 nonprofit employment report). Regardless of the influence that nonprofit organizations have in the United States, offering affordable, competitive health benefits to employees and job candidates seemingly gets more difficult each year.

non-profit, health benefits, health insurance reimbursement

Source: 2019 nonprofit employment report, Johns Hopkins

Health benefits options for nonprofit organizations

Luckily, leaders of nonprofit organizations don't have to search too long to discover the impact that a health reimbursement arrangement (HRA) can deliver for them and their employees.

Traditionally, employees have grown to expect employers to offer group health insurance. But for employers who can't afford group health insurance, or want to offer additional resources to employees, an HRA is the perfect solution.

What is an HRA?

A health reimbursement arrangement is a method for employers to reimburse employees for medical expenses like insurance premiums and out-of-pocket expenses, tax-free. With an HRA, employers choose an allowance cap for employees to use each month. The allowance typically rolls over each month, and ends at the end of each year. 

The primary benefits that employers enjoy with HRAs, are the ability to control health benefits spending. Once the allowance cap is set, it is impossible to spend beyond the allocated amount. Second, employers have a health benefit that helps attract and retain invaluable talent for their organization.

The Most Popular Types of HRAs

The three most popular types of HRAs are:

  • the Qualified Small Employer HRA (QSEHRA)
  • the Individual Coverage HRA (ICHRA)
  • the Group Coverage HRA (GCHRA)

Want to quickly compare the three HRAs? CLICK HERE to download our easy-to-follow comparison chart.

HRA benefits for nonprofit organizations

Effectively manage costs

We understand that no two nonprofit organizations are the same, and that nonprofits operate quite differently from most businesses. As we've worked with nonprofit organizations, we've learned that flexibility is key to managing your cash flow successfully.

An HRA is a good fit for nonprofit organizations  because it offers the ability to offer tax-free money to employees for health care expenses.

With an HRA, your organization can pre-determine the amount of money that is available to contribute to employees. And you benefit from the power to flexibly adjust the allowance amount based on budget constraints throughout the year.

It’s great for your workers too, since they have the freedom to use the allowance to purchase the health insurance and services that best fit their needs.

Hire and keep top workers

Since nonprofit organizations hire people of all ages, offering a competitive health benefit that works for everyone is crucial. One of the primary benefits of an HRA is the ability for each participant to determine how they want to use their allowance. That way, a more senior member of your team can purchase an insurance policy that works best for their needs at the same time a younger member of the team can choose another.

Simplify your administrative processes

Running a nonprofit organization can be administratively demanding. And most employees wear many hats within an organization. With massive amounts of records, regulations, and timelines to stay on top of, it’s no surprise that work-life balance is especially tricky for most firms.

Fortunately, adding an HRA through PeopleKeep doesn’t add more to a small firm’s administration burden. Both you and your employees can administer the HRA in an average of less than ten minutes each month.

Here's how it works

Once you set a monthly allowance amount, PeopleKeep educates your employees on their HRA plan and how to use it. Your employee buys the health care plan and services, and uploads expense documentation to their account.

Next, PeopleKeep verifies the expense, then notifies the employer the amount that is due for reimbursement. From there, the employer adds that amount due to the employee's next pay check.

What about keeping up with the ever-changing health care regulations? PeopleKeep does that for you as well. All required documentation is accessible at any time directly from the software. You can view and download what you need when you need it.

How to get started

If you're ready to get started now, signing up with PeopleKeep can take less than 15 minutes.

Sign Up

Or, if you have some unanswered questions, you can schedule some time with one of our HRA experts.

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