In a previous article, we learned that a quality employee benefits package could outcompete a salary raise. Considering the values based in a non-profit, it’s important to set a standard by providing health benefits to your employees. After all, they are the life and blood of the organization. Most nonprofit organizations run a tight budget, but that doesn’t mean they can’t offer employees a top tier benefits plan.
The truth behind employee benefits is that they can be affordable when you choose the right plan and provider. Instead of your typical insurance plan, consider a Health Spending Account (HSA). Unlike insurance, an HSA is a tax plan focused on minimizing health expenses for you and your employees. This type of plan works by eliminating the tax linked to your personal medical costs. It ensures that employees are able to spend the full dollar amount allocated by the employer. Most importantly, it is 100% legal and backed by the CRA. A Health Spending Account provider (such as Olympia) operates under strict CRA guidelines.
What is a Health Spending Account (HSA)?
A Health Spending Account (HSA) is a way to provide health and dental benefits to your employees. It is a tax tool that acts as an alternative to traditional health insurance. It allows the employer to provide health benefits to its employees using non-taxable dollars. With an HSA, you can budget wisely. There are no premiums. You simply allocate a certain budget to employees and they can spend that amount on the health-related expenses of their choice. It’s tax-free for the employee and tax-deductible for the employer. This happens through the claims process.
Does an HSA work for non-profit organizations?
Yes, any size non-profit can use an HSA. Simply select "not-for-profit" as your business type when signing up for an HSA.
How does an HSA work?
You (the employer) allocates money into a funding account with an HSA provider (ex. Olympia Benefits). Your employees can access these funds to pay for medical expenses not covered by your insurance or provincial health plan. The money is a tax deductible for the company and is 100% tax free for your employee, meaning the employees get to use ALL the money distributed to them. To read more on this, check out our claims process.
Will an HSA work with my existing employee benefits package?
A Health Spending Account (HSA) is a cost-effective and flexible addition to a business' group benefits. It is a modern health and dental care benefit which offers flexibility and cost-effectiveness that most traditional insurance providers typically don’t have. This type of benefits package is particularly useful for small nonprofits because it offers a budget friendly and proactive approach to your benefits. It can even work in conjunction with traditional health insurance, by covering any missed coverage. Additionally, premiums paid to an insurance provider are eligible for tax deduction through a Health Spending Account.
Why should I choose an HSA?
Health benefits can help you retain top talent and attract potential recruits. They have significant sway when a top candidate is choosing between job offers. Most importantly, they increase employee engagement as everyone knows a healthy employee is a happy and productive one.
Why choose an HSA over insurance?
- No monthly premiums
- No price increases on renewal
- Get unused money back
- Wide coverage with few restrictions
- No complex or hidden policies – simply pay for what you expense
- Customize your own plan
- Guaranteed cost savings (we can nail down your savings to the cent – calculate your savings here)
Traditional insurance plans typically offer one base price and aren’t budget friendly for small not for profit organizations. At the same time, they don’t provide your valued employees with much lenience in terms of coverage. With an HSA, you can create different spending limits based on your own employee classifications. You are in charge of the plan, every step of the way, from customization to monthly payments.
It is important to note that insurance providers typically offer both HSAs and insurance but only advertise insurance because it creates greater profits. That’s why you only see insurance on TV and radio (and media in general). Additionally, their HSA plans come with high administrative fees to persuade clients into a traditional insurance plan.
To sum things up, a Health Spending Account works particularly well as employee benefits for nonprofits due to high customization, low setup costs, and "pay as you spend" plan model.
To learn more about using a Health Spending Account for your nonprofit organization, download our FREE Beginner's Guide below:
More reading on employee benefits for nonprofit organizations: