Nonprofit Medical Renewal: What to Check First

Before you approve a renewal, check the plan itself, not only the price. Deductibles, out-of-pocket maximums, and emergency room and inpatient coverage can quietly get worse while the total looks like the only number that moved.

By Christopher Eklem, Business Performance Advisor at Insperity, San Francisco.

Medical benefits help nonprofits keep and attract talent. They are also one of the largest line items in the budget, and in recent years that line has tended to grow. Recent increases have been a leading concern in the nonprofit community, and with them come major decisions.

Look past the overall cost

The first step is to check every part of your renewed plans, not just the bottom-line number. Make sure your plans aren't being devalued. Watch for deductibles and out-of-pocket maximums that went up.

A renewal that costs a little less on paper can cost your team more every time they use it.

Check emergency room and inpatient care

Inspect the emergency room and inpatient care items. Those pieces are sometimes overlooked, and they are crucial to your employees' experience.

If a plan looks fine until someone ends up in the hospital, it isn't fine.

Look at FSA, HSA and HRA options

It may also be worth looking into a flexible spending account (FSA), a health savings account (HSA), or a health reimbursement arrangement (HRA). Christopher's view is that these can either improve what you offer, to be more competitive, or help contain costs.

Frequently asked questions

What should a nonprofit check at medical renewal besides the premium? Compare the whole plan, not just the total. Check whether deductibles and out-of-pocket maximums increased, and whether emergency room and inpatient coverage changed.

Why do deductibles and out-of-pocket maximums matter so much? They decide what your employees pay when they actually need care. A plan can be devalued without the headline cost changing much.

Can an FSA, HSA or HRA help a nonprofit? They may. Christopher suggests looking at them either to make your benefits more competitive or to contain costs.

Who can help a small nonprofit review a renewal? A benefits advisor can. Christopher says medical benefits are a major piece of Insperity's people operations partnership, and that Insperity directly allocates these benefits instead of profiting from them, which he says can help with cost containment and avoid devaluing employees' options. That is Christopher's description of Insperity's approach; check the details with any provider you consider.

About Christopher Eklem and Insperity

Christopher Eklem is a Business Performance Advisor at Insperity in San Francisco. He offered to be a resource for nonprofit leaders reviewing their benefits. Find him at insperity.com/christopher.eklem.

Where Givelink fits

Benefits take a big share of a nonprofit's budget, and supplies compete with them for what is left. Givelink is free for nonprofits: donors fund the exact items you list, you see what's coming before it arrives, and each gift is photo-verified on arrival. That keeps cash free for people and payroll. Want to see how it works? Start at Givelink for nonprofits.