Insurance agents: Save nonprofit clients up to 40 percent on state UI costs

April 23, 2014

Insurance agents: Save nonprofit clients up to 40 percent on state UI costs

Insurance agents who want to help their nonprofit clients save money and protect them financially from increasing unemployment insurance costs can assist these organizations in opting out of state unemployment insurance (UI) tax pools. 501c3 nonprofit organizations and governmental agencies have the option to self-insure and not pay via the tax method that all for-profit companies follow. This self-insurance designation, called reimbursing, allows nonprofits to avoid the volatility and price increases associated with state UI tax pools.

First Nonprofit Group provides alternative funding and risk management programs for nonprofits that maximize the savings of being a reimbursing employer while also mitigating the risk and difficulty of self-insuring. Organizations across the country have saved as much as 40 percent on their annual UI costs with savings programs from First Nonprofit Group.

Their cost-saving solutions are available to organizations with at least 10 employees and located in all 50 states. Any governmental employers and all 501(c)(3) organizations are eligible. First Nonprofit Group currently has more than 1,600 organizations in its various programs, covering more than 300,000 employees.

All nonprofits benefit from alternative measures for UI funding
Regardless of the size or mission of a nonprofit, opting out of state UI pools provides a significant reduction in UI costs. First Nonprofit Group has offered savings to a wide variety of organizations across the country. Below are a few examples of members in First Nonprofit Group's programs and their savings.

• A housing services organization with 64 employees reduced its UI costs with First Nonprofit Group from $21,766 annually to $9,981, a savings of nearly $12,000.
• A child services organization with 333 employees made annual contributions of $88,824 to state tax pools. The organization's annual cost dropped to $54,700 with membership in a First Nonprofit Group plan, saving more than $34,000.
• Joining a First Nonprofit Group program saved an educational services organization with 172 employees almost 50 percent on its UI costs. Instead of annual state tax payments of $199,728, the organization is now saving nearly $95,000 with a total annual payment of $105,000.

Nonprofit organizations change over time, as do their needs, that's why there are four options that insurance agents can help nonprofit clients choose from: a Bonded Service Program, an Unemployment Savings Program, Excess Loss Insurance and Surety Bonds. Unlike the State Unemployment Tax Fund, agents are eligible to receive commission for products. 

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.