For nonprofit leaders, the financial pressures can seem relentless, and health insurance costs have long been a leading concern. But some nonprofits are seeing relief this year.
For Rochester School of the Holy Childhood Inc., health insurance costs dropped by $100,000 in 2016. Legal Assistance of Western New York Inc. saved twice that sum this year. In total, 10 nonprofits have saved $1.1 million in 2016.
Wonder how they did that? Eight local nonprofits in Rochester and two based in Syracuse joined forces to create the New York Nonprofit Benefit Exchange. The project was coordinated through the Council of Agency Executives, a group of nonprofit leaders here, and the Human Services Leadership Council in Syracuse, made up of leaders of human services agencies there.
“It wasn’t a hard sell to get people around the table to discuss the potential,” said Donna Dedee, president and CEO of Holy Childhood.
The councils had long been looking to collaborate in ways that would help their member organizations, but this was a complex undertaking and took some time.
In the planning stages for almost two years, the health insurance coverage was made available to the 10 initial participants starting in January. It currently covers some 850 employees, all from nonprofits with at least 100 full-time employees, since smaller nonprofits fall under different rules in New York. While roughly 2,000 total employees were eligible, not all took coverage since some have insurance through their spouses or other sources.
Brown & Brown of New York Inc., insurance brokers, helped put the group together and negotiated a three-year deal with Excellus Health Plan Inc. to provide the insurance. The group remains fully insured and has multiple insurance products to offer employees as part of the deal.
“We have a very rich benefit plan,” said Katherine Howard, chief financial officer of Legal Assistance of Western New York.
The nonprofit was able to continue to provide a rich health insurance package and still save $200,000 to date with the NBE. In previous years, Howard had looked at other ways to lower costs, such as different carriers and other policies, including high-deductible plans. The savings were small to the agency while the risks, especially of high-deductible plans, put a burden on employees, so they never went that route, she said.
Michael Faillace, managing director of employee benefits at Brown & Brown, said getting similar organizations together to buy health insurance makes it easier for an insurer to calculate risk and offer a competitive price for plans. Brown & Brown has helped other coalitions, including a group of municipalities in the Finger Lakes as well as professional groups like the Auto Dealers Association, establish similar plans, he said.
But this one came together smoothly, Faillace noted. “Nonprofits are great collaborators,” he said. And the savings they have achieved so far, “that’s pushing more of the money for their causes.”
The nonprofit insurance consortium is governed by representatives of the 10 founding-member organizations, with Dedee recently elected to lead the board.
Savings have varied depending on the organization, but most lowered their insurance costs, and those that did not were able to offer their employees a wider range of benefits for similar cost, Dedee said.
“We’re excited. We definitely envision growth in future years,” said Loretta Zolkowski, executive director of the Syracuse-based leadership council.
Already two more agencies are in the pipeline to join the group and others continue to express interest. The 2017 plan year is expected to reflect 30 to 40 percent growth in the number of nonprofit employees covered under the plan, Faillace said.
Even nonprofits that have not joined say they are glad to know it is available as an option.
Gregory Soehner, CEO of East House Corp. in Rochester and president of the board for the Council of Agency Executives, said East House has had good rates and good benefits so it did not feel immediate pressure to jump aboard.
“We’ll take a look at it every year,” he said as he continues to compare options. “We hope it keeps growing.”
Melinda Goldberg, administrative director of the Council of Agency Executives, said opportunities like this prove the value of organizations like hers. The council includes more than 130 leaders from nonprofits, both small and large, all looking for ways to operate more efficiently and effectively.
“Anytime you can realize a cost savings, it’s a win-win for the organizations and the people they serve,” she said.
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