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.
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.