Insurance agents: help your nonprofit clients save money with unemployment tax alternatives

June 17, 2014

Insurance agents: help your nonprofit clients save money with unemployment tax alternatives

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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Testimonials

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.

Asian Health Services, Oakland, CA

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.

Ensight Skills Center, Inc, Fort Collins, CO

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.

Visually Impaired Preschool Services, Louisville, KY

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.

New York Council of Nonprofits, Albany, NY

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

Thresholds, Chicago, IL

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.

Illinois Network of Charter Schools, Chicago, IL

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.

Prevent Blindness America, Chicago, IL