Nonprofit HR Managers Getting Ulcers Over Health Plans

June 6, 2017       The NonProfit Times      

Benefits are hotter than normal of late, as employees worry about health coverage, particularly those at nonprofits where benefits are minimal or non-existent. Employers are starting to respond.

According to the 2017 edition of the The Nonprofit Times and Bluewater Nonprofit Solutions “Nonprofit Organizations Salary & Benefits Report,” the average percentage paid by an organization for an employee-only health plan is about 84 percent. It ranges anywhere from 79 to 90 percent, depending on the number of employees. Almost 500 organizations from around the country participated in this year’s survey.

The United Way of Northwest Louisiana (UWNL) and Friends of Van Cortlandt Park (FVCP) might seem as if they are worlds apart, separated by some 1,500 miles. Like any nonprofit though, hiring managers face their unique challenges when it comes to salaries and benefits to attract and retain employees.

UWNL has managed to keep turnover to a minimum among its 10 full-time employees and roughly $3-million budget. There’s an effort to offer a hearty benefits package to try to offset what’s probably a lean salary. During the past few years, though, the Shreveport, La.-based affiliate has faced increases of up to 20 percent in medical plan costs, according to Chief Operating Officer Lynn Stevens.

They moved away from 100-percent funded healthcare for employees two years ago, going to an 80/20 split for its Preferred Provider Organization (PPO) plan. That’s about in line with what most charities do, according to the new report.

Among the almost 100 partners working with United Way, Stevens said she’s seen some charities do away completely with the benefits plan for all but management or offer it on a different scale.

Stevens attributed the increasing healthcare costs to a limited choice of health insurance providers in Louisiana and the Affordable Care Act (ACA). “Three years in, we’re seeing some of the ripples get to our state,” which prior to ACA did not have a high percentage of residents with health insurance, Stevens said. Louisiana typically ranks near the bottom among the 50 states in most health indicators and the ACA increased health insurance coverage in a state where there are only about five carriers.

Almost 87 percent of nonprofits surveyed offered some type of medical plan for employees. The most popular among the survey participants is a Preferred Provider Organization (PPO) Plan, with almost 65 percent offering it. At least half of the organizations in each category by offered a PPO plan, with the smallest, 1 to 10 employees, being the most popular at 73 percent.

Other plans, by popularity, included High Deductible High Plan (HDHP), almost 31 percent, and Health Maintenance Organization (HMO) Plan, almost 28 percent. The least common medical plans were Point of Service (10.88 percent) and traditional fee-for-service indemnity plan (1.76 percent).

Survey results indicated that participant organizations might be moving toward a HDHP plan, with the percentage of organizations offering it up 52 percent last year compared to 2015 while HMO and POS plans both declined, 3.3 percent, and 7.7 percent respectively. The percentage of nonprofits offering PPO plans was up about 5 percent.

The average staff salary increase in this year’s survey approached 3 percent in the past two years; 2.87 percent last year and 2.88 percent the year before that. The average wage hike was similar across all budget levels and fields. Increases by operating budget ranged from a low of 2.31 percent among organizations of $10 million to less than $25 million to a high of 3.21 percent among those $500,000 to less than $1 million.

By field of work, average wage hikes varied from 2.28 percent among education organizations to 3.66 percent and 3.67 percent, for arts, culture and humanities organizations and environment and animal groups, respectively.
Geographically, the average salary increases varied even less. The lowest average increase was found in the South Central, at 2.59 percent, but the highest increase, in the Southeast, was 3.16 percent.