After time off and retirement plans, health insurance is one of the most common benefits small-staffed foundations offer staff. Consider, in the 2023 Foundation Operations and Management Report, 78% of foundations offered health insurance for full-time staff.
One of the most frequent topics on our Member Discussion Community is how to best go about securing health insurance for staff. In this blog, Exponent Philanthropy members share three possible options.
Reimburse Staff With an ICHRA
“My foundation reimbursed our premiums for two years under QSEHRA, and we are now getting ready to set up an ICHRA as I move into the open market after losing coverage under my spouse’s plan. I highly recommend Take Command Health as a resource.”– Julie Boudreau, MPH, John and Wauna Harman Foundation, CA
“We got great advice from Exponent Philanthropy’s discussion community and ended up choosing a QSEHRA for our four staff members who are based in three states and have a variety of needs (premiums for coverage on a spousal plan vs individual coverage from the marketplace vs direct medical expenses. A variety of third-party administrators are available to manage QSEHRA plans, and so far, we have had a good experience with PeopleKeep as the administrator of our plan.”– Sarah E. Reed, PhD, Robert and Patricia Switzer Foundation, ME
Provide a Salary Add-on
“I am the only employee at our foundation, and because my spouse’s employer offers health insurance, the foundation gives me an add-on to my salary that is similar to the amount that my spouse pays pre-tax for full family coverage. While this means that I pay taxes on the add-on, our board views it as part of my salary, so it will be subject to annual COLA increases and raises, which the board offers as percentage increases.”– Ruth Kaleniecki, Metro Health Foundation, MI
Consider an Insurance Broker
“After years getting by using health insurance coverage of spouses or ‘grossing up’ pay to help employees obtain health insurance, we decided to offer our own. A lot of advice pointed me towards a professional employer organization (PEO). However, I soon discovered that the majority of PEOs would not consider organizations with less than five full-time staff.
I submitted three applications to PEOs, but in all three cases they declined. As I understand it, PEOs look at the health circumstances of the individuals’ seeking coverage, and we were likely declined because one of our employees has a chronic health condition. This seemed topsy-turvy to me, as I thought the whole purpose of PEOs was to be part of a group large enough that somebody with above-average health needs would not be problematic. But my experience was precisely the opposite.
Ultimately, we obtained an excellent Blue Cross Blue Shield PPO plan from a broker experienced with nonprofits, and for a fraction of the cost that I’d been led to expect. We then added on good ancillary (dental, vision, short-term disability, and life) insurance for all employees–again, for much less than I’d feared–and voilà, we had an insurance benefit. So, I would encourage colleagues to consider getting insurance through a broker rather than a PEO. There are other services offered by a PEO that may be useful to some foundations (e.g., payroll processing, employee manuals/onboarding), but those were not of interest to us; we simply wanted top-offer good health insurance as an employee benefit.”– Rob DiLeonardi, VNA Foundation, IL
Health Insurance Costs
The 2023 FOMR also found the average monthly premium for an individual, couple, and family. They did not vary by asset size, foundation type, or number of staff.
Average monthly health insurance premiums for:
- An individual: $821 (median: $792).
- A couple: $1,489 (median: $1,384).
- A family: $1,995 (median: $1,922).
Download the 2023 Foundation Operations and Management Report to learn more about the cost and benefits foundations provide staff.
For more on how leanly staffed foundations provide health insurance, ask your peers on our Member Discussion Community.
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About the Author
Brendan McCormick is the associate director of research and publications at Exponent Philanthropy. He works with members, partners, and staff to develop resources and research on our funder community.