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.
Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.
My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!
First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!
My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!
I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years
ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!
I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!
First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.
Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!