April 30, 2015
Making the election to opt out of paying the state unemployment tax in favor of reimbursing the state for future benefits paid to former employees may complicate the budget process, upset typical cash flow, and create uncertainty about potential risks. But the best and safest options for managing the perils are very clear.
THE PROBLEM: Attaining maximum use of every dollar of revenue requires a rigorous and strategic effort from nonprofit organizations, governmental entities and tribal enterprises, EVERY YEAR! The center point for that effort is always the “Annual Budget” formation, which for many fluctuates capriciously often because of:
• Competition for services and funding dollars
• Changing state funding
• Changing federal financial support
• Regulatory compliance issues
• Changing workforce problems and necessities
Yet when those complications threaten the budget process, use of thoughtful, strategic options sustains and supports positive cash flow, sustained compliance and reliable protection.
BEST AND SAFEST PRACTICES: Employers successfully transfer risk and manage a variety of diverse liabilities (property & liability, auto, workers’ compensation, umbrella, D&O, etc.) by engaging specific insurance products. It is indisputable that an insured risk by a reliable, reputable insurance company is the safest solution for defending against unknown future liabilities. Accordingly, liability such as State Unemployment Insurance is similarly effective. Here are five of the best and safest solutions available for managing the State Unemployment Insurance (SUI) cost:
1. Bonded Service Program: Risk free, first and last-dollar coverage with claims administration
2. Unemployment Savings Program: Proprietary interest-bearing reserve with claims administration and stop-loss insurance
3. Excess Loss Insurance: “Working Excess Coverage” fits level of risk retention that works best for the employing entity
4. Surety Bonds: Required in many states for “reimbursing employers”
5. Group Program Management: Program formation, consultation, risk transfer design and administration for nonprofit entities, governmental entities and tribal enterprises
Source: First Nonprofit Group’s “Financial Mechanics of Funding SUTA” series
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.
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.
NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.
It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios. We are impressed with the accuracy of their employment decisions, integrity of their employees and efficiency of their claim handling. We greatly respect and value the consistent, impressive cost savings from the utilization of their outstanding services.
Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.
Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.