June 17, 2014
From providing common insurance coverage such as auto, building and commercial lines to business liability and worker's compensation, insurance providers seem to have a solution for every risk. The most common option overlooked by insurance brokers is the alternatives offered to opt out of paying the state unemployment insurance tax (SUTA). The Unemployment Savings Program and the Bonded Service Program are often the best choices for charitable organizations to save money. Additionally, insurance agents and brokers offering these ingenious products are eligible for commission upon engagement.
These options allow nonprofits already excluded from paying federal unemployment taxes, to also avoid contributing to the SUTA fund. Instead of paying into a state pool that assumes shared liability and have their year-to-year tax costs change based on economic conditions, 501(c)(3) groups and governmental entities can opt out of the state pool. By electing to self-insure and pay unemployment claims on a dollar-for-dollar basis nonprofit employers normally reduce costs considerably. However, nonprofits still need to budget enough money to pay future unemployment claims to their former employees and while managing spikes in unemployment costs during economic downturns. First Nonprofit Group offers unemployment solutions for nonprofits, providing more flexibility and security for these organizations than an individual savings account would.
Uncertainty common in SUI pools
InsuranceNewsNet clearly explains the necessity of having large state sponsored Trust Funds as well as their unstable nature. They point out that Due to increased claims and high levels of borrowing during the Great Recession, 16 states have a collective debt of more than $21 billion to the federal government. Of these, California is carrying $9.8 billion in debt and four other states owe more than $1 billion each. Furthermore, many of these states have increased their SUTA tax or increased taxable wage bases in response to low fund balances. Those factors are squeezing the budgets of all employers paying the SUTA tax.
It can be difficult enough for a for-profit company, which has the ultimate goal of generating profits or paying shareholders, to weather these challenges. As for nonprofit groups, rising unemployment taxes can be a serious problem. Luckily, thanks to First Nonprofit Group, insurance agents and brokers have an array of valuable products to offer their nonprofit clients.
For information on how your nonprofit clients can cost-effectively meet their unemployment insurance needs, contact First Nonprofit Group at FNCUI@firstnonprofit.com or visit www.firstnonprofitgroup.com.
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Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.
The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.
In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.
We have had a great experience with FNP. During Covid, when there was the chance that reimbursable nonprofits would have to pay 50% of the unemployment costs, FNP went to bat for us. We would receive weekly information on the Unemployment claim and how they were working to reduce the costs to reimbursable nonprofits. They have a great service also working with [our claims administrator] to make sure all the paperwork is completed correctly for any unemployment claim.
PORT Health Services has had a great experience with the Unemployment Savings Program offered through First Nonprofit. Throughout the years we have been involved in the program, we have increased our reserve account significantly through this program and find the reporting we receive both timely and useful. We look forward to our continued involvement with this program and our connection with First Nonprofit for many years to come.
Job One was spending a lot of money on unemployment. Our insurance broker, Mark Simcosky, recommended that we switch over to First Nonprofit. We did just that! This switch has been a huge savings for us! This switch saved us over $10,000 in the first year. Their customer service is Superior! Any time we have a question, we get a response very quickly. Any time we send them a report and they have a question; they call rather than just assuming. They were very responsive during COVID, even when they were in crisis mode their selves. They also were always there when we needed during COVID and very helpful! We would 1,000% recommend First Nonprofit to anybody that could benefit from it!
My experience with FNP has always been positive. Every time I have had to contact them, I’m always put in contact with a friendly and knowledgeable person. If something is missing from our account, they reach out to us to request it. It’s nice to work with a company that makes sure our account is current. I would recommend them to any nonprofit looking to reduce their unemployment insurance costs.
We’ve saved tens of thousands of dollars PER YEAR by changing to become a reimbursing employer, freeing funds for much needed capital investment. FNP has been a valued partner in this process, providing assurance that we have stopgap coverage for extraordinary claims and keeping claims response painless and simple. It’s a huge Win/Win!