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Rising Medical and Benefit Costs Impact Nonprofits

Armen Hareyan's picture

Higher premiums for medical and dental plans, reduced coverage, and larger deductibles and co-pays paid out-of-pocket are all options as nonprofit organizations face rising benefit costs for their employees. To effectively manage benefit programs and control costs, nonprofits need information on health plan costs and benefit practices in other comparable organizations as they consider benefit changes.

Released July 1, 2008 Benefits in Nonprofit Organizations, 8th Edition, prepared by Abbott, Langer Association Surveys, includes the results of a survey of benefits offered by nonprofits and their cost. The 210 respondents included 64 percent organizations with fewer than 100 employees and 28 percent with 100 to 499; the remaining 8 percent employed 500 or more. Medical and dental plans covering close to 30,000 nonprofit employees across the United States were reviewed.

Details on medical, vision, dental, disability, and life insurance, along with retirement plans, are presented, as well as paid leave and executive perquisites.

For the first time, this year’s report adds valuable data on benefits costs for both employer and employee. With this survey information, nonprofits can find the type and level of benefits provided by comparable organizations to help evaluate their current and future benefit changes and strategies.

The 2008 survey reports:

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* Over half of respondents have a Preferred Provider Organization (PPO) plan as the primary medical plan.
o The average employee cost for employee-only coverage is almost $71 per month.
o The average employer cost for employee-only coverage is $388 per month – 85% of the total premium cost.

* While 94% offer some type of retirement plan, only 13% are defined benefit plans; most common is a 403(b) plan.

* While 73% offer traditional leave plans typically consisting of sick days, vacation, bereavement leave, personal leave, and floating holidays, the remaining 27% combine all or part of paid leave into a pool (Paid Time Off or PTO plans), granting an average of 17 days of paid leave per year.

* 85% offer dental plans, with Dental PPOs (62%) as the most common type.

* Life insurance is provided by 90% of respondents and 70% offer a long-term disability plan.

Copies of the report are available for $489 at www.abbott-langer.com. An additional report on medical benefit trends in the nonprofit, government, and for-profit sectors entitled 2008 Health Care Benefits Benchmarking Survey is also available for $289 at the site.