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The 2015 Nonprofit Employee Benefits Survey

COMPREHENSIVE ANALYSIS

AN ANNUAL RESEARCH REPORT BY PPI BENEFIT SOLUTIONS (PPI)

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Page 2PPI Benefit Solutions 2015 Nonprofit Employee Benefits Survey

TABLE OF CONTENTSRE

SULT

SExecutive Summary

Prevalence of Benefits

Selecting Benefit Plans

Enrollment Methods

Eligibility and Waiting Periods

Contribution Strategies

Copays, Coinsurance, and Deductibles

Prescriptions

Compliance

Conclusion

Overview of Participants

About the Survey


2015 is a monumental year for employer-sponsored benefits as the Affordable Care Act’s (ACA) Employer Mandate, or “Pay or Play,” became effective January 1st for employers with 100 or more full-time equivalent employees. In addition to the perennial strain of rising healthcare costs, these unprecedented regulatory changes are putting additional pressure on employers as they determine if, when, and how the law applies, whether they qualify for a delay in its implementation, what constitutes a full-time employee, and how to satisfy the new IRS reporting requirements. Our 2015 Nonprofit Employee Benefits Survey results indicate that nonprofits’ understanding of the ACA has dropped: in 2014, 92% of surveyed nonprofits felt they had at least a moderate understanding of the law; in 2015 that number plummeted to 47%. In 2014, 18% of employers felt that they were extremely knowledgeable of the ACA, only 5% made that claim in 2015.

Although few nonprofit organizations (NPOs) are going so far as to eliminate healthcare benefits or reduce their employee-only premium contributions as a result of the ACA, they are changing the types of plans being offered and decreasing dependent contributions, thus shifting more cost onto employees. This trend is reflected among our 2015 survey results. 56% of surveyed nonprofits now have a Health Savings Account (HSA) option in place, up from only 12% in 2014, evidence that consumer directed health plans (CDHPs) are quickly gaining momentum throughout the nonprofit sector.

As a trade-off for lower premiums, HSA-compatible plans feature high deductibles, exposing consumers to the true costs of the care they receive. To help offset these high deductibles, more employers are offering group voluntary products that feature very low premiums and help reduce an employee’s overall out-of-pocket expenses. One might infer that access to these products supports nonprofit employee retention efforts, which can be a challenge in an accelerating economy.

EXECUTIVE SUMMARY

Although not highest on the list of challenges, easing the benefits administration burden through automation can impact the bottom line, especially given the volume of data employers must maintain and harvest to comply with new regulations. In addition, we see less resistance to employee self-service, as former concerns about the lack of Internet access and familiarity among personnel are waning. In 2014, 15% of surveyed nonprofits used employee self-service, and in 2015, that number has increased to 23%. As more NPOs embrace technology to manage their operations, it is likely that employee self-service adoption will continue on this upward trend. We hope the following survey report provides you with helpful information! We welcome your feedback and ideas for future surveys.

Key 2015 Results:

Nonprofits are growing less confident in their understanding of Healthcare Reform (ACA) as new regulations are put into effect: see page 25.

The majority of nonprofits have not calculated the cost of compliance with Healthcare Reform (ACA): see page 25.

More employers are offering High Deductible Health Plans and Tax Advantage Accounts to control costs: see page 6.

The prevalence of voluntary benefits continues to rise as a way to increase choice for employees at little to no cost for employers: see page 6.

The transition away from paper enrollment has been slow among nonprofits, but use of online self-service is steadily increasing: see page 11.


PREVALENCE OF BENEFITS

The most prevalent benefits among surveyed nonprofits are group medical, group dental, and employer-paid life insurance, each of which are offered by more than 90% of participants. Nearly 100% of participants offer group medical to employees, which may be a result of new regulations imposed by Healthcare Reform (ACA).

These regulations state that beginning in 2015, employers with 100 or more full-time employees (which made up about 75% of our 2015 survey participants) must offer affordable medical coverage to full-time employees, and their dependents, or be subject to certain penalties.

All Benefits.

Other Membership or Discount Programs

Pet Insurance

Tuition Assistance/Continuing Education

Identity Theft

Doctors by phone or online

Group Legal

Long-Term Care

Cancer Benefit

Critical Illness

Accident Insurance (separate from AD&D)

Voluntary Short-Term Disability (STD)

Voluntary Long-Term Disability (LTD)

Voluntary Vision

Voluntary Dental

Supplemental Medical

Child Life

Spouse Life

Voluntary Life

Group Short-Term Disability (STD)

Group Long-Term Disability (LTD)

Group Vision

Tax Advantage Accounts (HSA, HRA, FSA, etc.)

Employer-Paid Life Insurance

Group Dental (of any plan type)

Group Medical

7.1%

35.4%

7.1%

29.2%

4.6%

5.8%

18.3%

10.8%

25.4%

20.4%

34.2%

22.1%

31.7%

28.3%

36.3%

8.3%

54.6%

49.2%

70.4%

80.9%

47.1%

94.7%

93.5%

19.6%

98.8%

Medical Plans.

Preferred Provider Organizations (PPOs) are the most common medical plan type offered by surveyed nonprofits. In addition, 55.6% of nonprofit medical plans can be categorized as a High Deductible Health Plan (HDHP). HDHPs have lower premiums and higher deductibles than traditional health plans.


What’s the Difference Between a Medical PPO, POS, HMO, and EPO?

Dental Plans.

Preferred Provider Organizations (PPOs) are the most common dental plan type offered by surveyed nonprofits, accounting for 73.7% of results.

The general characteristics of a dental PPO, POS, and DMO/DHMO (refer to HMO in the chart) are comparable to medical, so please refer to the chart on the left for basic guidance.

A dental plan described as a “monthly switch” allows employees to switch between a DMO/DHMO and either a PPO or indemnity plan. An indemnity plan, or fee-for-service plan, reimburses the covered person for incurred expenses once the deductible is met.

Have To Stay In-Network? Cost-Sharing Advantages/

Disadvantages

PPO (Preferred Provider

Organization)No Deductible,

copay

Flexibility; no referrals;

expensive copays

POS (Point of Service) No Deductible,

copayLower cost if in-network

HMO (Health Maintenance Organization)

Yes, except emergencies Copay

Lower cost; less freedom to choose provider

EPO (Exclusive Provider

Organization)Yes Copay

Lower cost; more restrictive

network

Indemnity

Monthly Switch

DMO/DHMO

POS

PPO 73.7%

10.5%

39.8%

2.3%

4.7%

HDHP

EPO

Indemnity

HMO

POS

PPO 54.6%

35.2%

31.9%

0.5%

21.3%

55.6%

1) More HDHPs

2) More Tax Advantage Accounts*Graph shows change from 2014 to 2015

3) More Voluntary Benefits*Graph shows change from 2014 to 2015

Perc

enta

ge


Tax Advantage Accounts.

Flexible Spending Accounts (FSAs) are the most common type of tax advantage account offered by nonprofits, accounting for 82.0% of results. This shows a 23.8% increase over 2014, when FSAs were offered by 58.2% of participants.

Who contributes?

Who owns the account?

Does the money roll over?

HSA (Health Savings

Account)

Employer or employee Employee Yes

HRA (Health Reimbursement

Account)Employer only Employer Employer

decides

FSA (Flexible Spending Account)

Employer or employee Employer

Some employers allow up to $500;

otherwise the money goes back to the

employer

What’s the Difference Between an HSA, HRA, and FSA?

INSIGHT: More Employers Offering HDHPs, Tax Advantage Accounts, and Voluntary Benefits to Help Control Costs

Transit/Parking

Dependent CareSpending Account

Limited Purpose FSA

FSA

HRA

HSA

49.6%

55.6%

82.0%

51.9%

69.9%

27.8%

0

20

40

60

80

100

FSA

HSA

HRA

Perc

enta

ge0

10

20

30

40

50

Critical Illness

Transit

Cancer

30

40

50

60

2014

2015

2013

Perc

enta

ge

Employer-Paid Life Insurance. Paid Leave.


The most common employer-paid life insurance is “1X Salary,” accounting for 36.1% of results. Of the 8.4% of participants who selected “other,” 65% wrote in “1.5X Salary”.

Paid time off (bundled vacation,

sick, personal days)

Paid time off annual rollover allowance

Bought time off

Floating holidays

Paid sick leavecash-out option

Vacation days

Parental leave/ Elder care

Military leave

Paternity leave

Holidays

Personal days

Bereavement

Sick leave

39.1%

28.2%

2.9%

96.0%

32.8%

79.9%

7.5%

75.3%

59.8%

83.3%

26.4%

40.8%

28.7%

The most prevalent paid leave benefits offered by nonprofits are holidays, bereavement time, and sick leave. Vacation days and personal days are also offered by the large majority.

3.0% 3X Salary

36.1%1X Salary

22.3%2X Salary

0.0% 5X Salary

0.6%4X Salary

9.0% $40,000 to $74,999

9.6%$1 to $19,999

9.0%$20,000 to $39,999

8.4% Other

1.8%$75,000 or more

Multiple of Annual Income:

Fixed Dollar Amount:

Wellness Programs.


Employee AssistancePrograms (EAP)

66.9%Flu vaccinations

51.9%

Gym membership discount or reimbursement

Health fairs

Health/biometricscreenings

Healthcare advocate/coach

Services provided by a third party wellness company

Onsite gym facility

Nutritional counseling

Premium discounts for participation in a wellness program

Premium discount for completing a Health Risk Assessment

Premium discount for participation in a weight loss program

Premium discounts for not using tobacco products

Telemedicine Services

39.1% 24.8%

20.3% 19.5%

14.3% 13.5%

12.8% 9.8%

8.3% 5.3%

4.5% 3.0%

Employee assistance programs (EAPs) are the most common wellness benefit offered by nonprofit employers, as reported by 66.9% of participants. This represents a 7.5% increase from 2014 results, and a 33% increase since 2013. Following EAPs are flu vaccinations, gym membership discounts or reimbursements, health fairs, and health/biometric screenings.

97.3% 85.9% 80.4% 79.6%

Key

SELECTING BENEFIT PLANS

Extremely important

Very important

Moderately important

Slightly important

Not at all important

Objectives.

Not surprisingly, the number one objective when selecting benefit plans continues to be “controlling costs,” as indicated by the 97.3% of participants who rated it “very” to “extremely” important. This was considered the top objective in both 2013 and 2014 as well. Following this is “attracting and retaining employees” and “increasing employee job satisfaction.” This combination of trying to control the cost of benefits while using them to attract talent and improve employee job satisfaction creates a tough balancing act for employers.

Nearly 80% of employers also consider “providing benefit options that are easy to understand” a top objective. Very few participantsconsider any of the listed objectives to be “slightly” to “not at all important.”


Objectives Considered “Very” to “Extremely” Important

Controlling costs

Attracting & retaining employees

Increasing employee job satisfaction

Providing benefit options that are easy to understand

97.3% 85.9% 80.4% 79.6%

97.3% 85.9% 80.4% 79.6%

97.3% 85.9% 80.4% 79.6%

Encouraging healthy lifestyles

Addressing employees' diverse needs

Providing benefit options that areeasy to understand

Reducing benefit administration costs

Increasing employee job satisfaction

Attracting & retaining employees

Controlling costs 75.2%

41.8%

31.8%

35.9%

34.1%

28.6%

32.0%

44.1%

22.1%

48.6%

38.2%

45.5%

40.5%

35.6%

13.2%

18.2%

20.9%

17.7%

25.5%

25.6%

5.0%

5.5%

Statistics less than 5% are not labeled

Key

Challenges.

Extremely challenging

Very challenging

Moderately challenging

Slightly challenging

Not at all challenging

The most challenging factor when providing employee benefits is “cost to nonprofit,” as indicated by the 89.4% of participants who rated this “very” to “extremely” challenging. “Cost to employees” is the second most challenging factor, and has been a rising concern since 2009.

It is surprising that the number of participants who consider “Healthcare Reform Implementation” to be “extremely challenging” has decreased almost 10% in the last year, from 28.3% in 2014 to 18.4% in 2015. This contradicts results listed later in this report which show that nonprofits are growing less confident in their understanding of Healthcare Reform. We suspect that this is because nonprofits have begun relying more heavily on their brokers or benefits administrators when it comes to Healthcare Reform, and therefore see it as less of a challenge.


“Cost to Employees” Has Steadily

Increased as a Top Challenge

Since 2009

40

50

60

70

80

2014 2015

2013

200947.0%

70.0%

78.7% 79.3%


Meeting the needs of diverseemployee populations

Healthcare Reform Implementation

Employee resistance to change

Compliance with state and federalregulations

Competition for talent

Employee education andcommunication

Administrative burden

Plan design/quality of benefitsand networks

Cost to employees

Cost to nonprofit 59.4% 30.9% 9.7%

42.9% 36.4% 14.3%

20.5% 38.1% 28.8%

11.2% 20.5% 43.7%

10.2% 31.5% 37.0%

9.9% 22.5% 38.5%

13.8% 20.3% 32.3%

12.0% 30.4% 35.0%

18.4% 26.9% 34.0%

15.3% 25.9% 40.3%

20.0%

24.0%

19.7%

15.7%

15.7%

14.2%

14.8%

9.8%

9.4%

9.7%

5.6%

6.9%

6.6%

ENROLLMENT METHODS

Paper

One-On-One Meetings

Online Employee Self-Service

Telephonic


Paper EnrollmentDecreasing

Online Employee Self-Service Increasing

5

10

15

20

25

2014

2015

2013

Perc

enta

ge

INSIGHT: Nonprofit Use of Employee Self-Service Steadily Increasing

2014

2015

100

80

60

Perc

enta

gePe

rcen

tage

Group Meetings

Paper enrollment is the most widely used enrollment method among nonprofit employers. Although paper has been the top result for the last several years, its prevalence has begun to decline, dropping from 83.8% in 2014 to 72.8% in 2015.

We find it surprising that nonprofits still rely so heavily on paper, while corporate employers continue to move towards paperless enrollment.We expect to see this downward trend continue in years to come.

In comparison, online employee self-service rose from 14.5% in 2014 to 22.8% in 2015.

Why Are Nonprofits Moving to Employee Self-Service?

• Reduces burden on limited staff by eliminating time consuming and tedious paper processing

• Empowers employees to become more involved in their benefits

• Increases security of employees’ personal and identifiable information

• Easier to manage eligibility data over multiple classes of employees

• Gives employees 24/7 access to benefits information

72.8% 55.8%

49.1% 22.8%

3.6%

11.0%

8.3%

5.7%


ELIGIBILITY AND WAITING PERIODSMedical Eligibility.

A majority of nonprofits, 52.1%, require employees to work 30 hours per week to be eligible for medical benefits. This was true in 2014 as well, and accounted for 35.2% of results.

To be eligible for medical benefits, 12.4% of participants still require employees to work more than 30 hours per week. Depending on the size of the employer and its orientation period, this may not comply with ACA requirements.

What is the ACA’s Employer Mandate?

The ACA’s Employer Mandate requires employers to offer health insurance that is affordable and provides minimum value to their full-time employees and dependents or face penalties.

Who does this apply to?

Who is considered a full-time employee?An employee who works an average of 30 hours or more per week.

Who is considered a full-time equivalent employee?A combination of employees, each of whom individually is not full-time, but who, in combination, are equivalent to a full-time employee.

What does “minimum value” mean?A plan provides “minimum value” if it is designed to pay at least 60% of the total cost of medical services for a standard population.

How is “affordable” coverage determined?Coverage is considered “affordable” if the employee’s contribution for self-only coverage does not exceed 9.5% of the employee’s wages.

For more information, please see our Healthcare Reform Kit at ppibenefits.com/HCR-Kit.

2015 2016

Employers with 1-49 Full-Time

Equivalent EmployeesN/A N/A

Employers with 50-99 Full-Time

Equivalent Employees

Additional one-year delay as long as certain

conditions are met

Employer must offer coverage to 95% of full-time employees

Employers with 100 or More

Full-Time Equivalent Employees



30 Hrs/Wk52.1%

21-29 Hrs/Wk16.6%

20 Hrs/Wk15.2%

More than 30 Hrs/Wk

12.4%

Less than20 Hrs/Wk

3.7%


Medical Waiting Period. Life Waiting Period.“First of the month following the date of hire” is the most common waiting period for nonprofit medical plans, accounting for 25.3% of results. 2.8% of surveyed nonprofits impose a medical waiting period of “first of the month after 90 days,” which, depending on the date of hire, may not be in compliance with the ACA.

Under the ACA, a group health plan or payer offering group health insurance coverage may not apply any waiting period that exceeds 90 days. For plan years beginning 1/1/2015, final rules allow for a one month employment-based orientation period. However, depending on the length of the subsequent waiting period, the employer may be out of compliance with the Employer Mandate which requires coverage be offered to a full-time employee by the first day of the fourth month following employment.

“First of the month following the date of hire” is the most common waiting period for nonprofit life plans, accounting for 26.1% of results.

12.4% of respondents selected “other,” the majority of whom wrote in “first of the month after 90 days.” Some, however, indicated that their waiting periods are as long as “one year” or “first of the month after 12 months.”

5.5% 30 days from date of hire

10.1%Active upon date of hire


4.1%60 days from date of hire

13.8% First of the month after 30 days

25.3%First of the month following date of hire


20.7%First of the month after 60 days


14.3%Active upon date of hire


3.1%60 days from date of hire


26.1%First of the month following date of hire

10.6%First of the month after 60 days

Based on years of service

Based on compensation

or position

Percentage of premium

Varies by plan type

No dependent coverage

2-tier structure

3-tier structure

4-tier structure

Defined contribution

Other


CONTRIBUTION STRATEGIESMedical Contribution Strategies.

The majority of nonprofit medical plans feature a percentage of premium contribution with a four tier rate structure (employee only, employee plus spouse, employee plus child(ren), employee plus family).

Of the participants who selected “Other,” most specified that they base contributions on the number of hours employees work.

Defined Contribution Strategies.

We asked participants who currently use a defined contribution funding strategy to describe how the contributions are structured:

Some coverages remain 100% employer-paid

Health plan waivers retain full contribution

Health plan waivers forfeit contributions

Health plan waivers receive a smaller contribution

Employees forfeit any remaining credit

Employees retain any unused credit

82.2%

1.4%

19.2%

8.2%

8.2%

1.4%

Fixed dollar amount by

dependent tier33.7%

Other13.7% Equal, fixed

dollar amount for all employees

27.4%Separate

contributionsfor medical andother benefits

25.3%

Percentage of premium

Defined contribution

Based on years of service

Based on compensation

or position

Varies by plan type

No dependent coverage

2-tier dependent

structure

3-tier dependent structure

4-tier dependent

structure

Other

10.7%

41.1%

5.4%

13.1%

13.1%

5.4%

5.4%

11.3%

39.3%

6.0%

Key

Funding of Medical Coverage For Employees and Dependents.


Do not coverPaid 100% by organizationCost shared by organization and employeePaid 100% by employee

The cost of medical coverage for employees and dependents is most often split between the organization and the employee. The majority of surveyed nonprofits do not extend medical coverage to part-time employees, non-dependent children*, or dependent grandchildren. *Employers who do not offer coverage to non-dependent children may not be in compliance with the ACA. The ACA requires that if coverage is offered to children, eligibility cannot be conditioned upon financial dependence. It can only be conditioned upon relationship (birth or adopted children) and age (until 26).


Full-Time Employees

Part-Time Employees

Opposite-Sex Spouses

Same-Sex Spouses

Opposite-Sex Domestic Partners

Same-SexDomesticPartners

Dependent Children

Foster Children

Non-Dependent Children

Dependent Grandchildren

85.0%52.0%

75.9% 71.1%

46.4%47.7%

77.1% 48.4%

65.4% 61.9%

32.3%

13.5%

16.2%16.1%

35.5%

14.5%

12.8%

33.2%

16.3% 17.1%

31.1%

16.4%

23.3%

13.2%

21.3%

Key


Funding of Additional Benefits.

Dental LifeLong-Term Disability

Short-Term Disability Vision

Paid in full by employer

Cost shared by employer and employee

Employer-paid base plan with employee buy-up

Employee-paid (voluntary)

Do not offer

The cost of dental coverage is most commonly shared by employer and employee, as noted by 60% of participants. About 25% of employers cover the full cost of dental coverage for employees.

Life insurance is most often covered 100% by the employer, as indicated by nearly 85% of participants. The majority of surveyed nonprofits also cover the cost of long-term disability, 71.4%, and short-term disability, 53.3%.

Funding of employer-sponsored vision is fairly evenly split between employer-paid and cost shared. Almost 25% of participants only offer voluntary vision (employee-paid), and nearly 30% do not offer vision coverage at all.

26.9%

59.6%

10.5%

71.4%

10.1%

12.5%

27.7%

18.7%

24.7%

28.3%

83.5%

7.6%

5.3%

53.3%

17.4%

21.0%

6.0%Statistics less than 5% are not labeled

None

Less than $50

$50 to $100

$101 to $150

$151 to $200

$201 to $250

$251 to $300

$301 to $400

$401 to $500

$501 to $600

$601 to $750

More than $750


Monthly Employee Payroll Deduction for the Medical Plan with the Most Enrolled Participants.

Employee Only - Employee Payroll Deduction Employee Plus Child(ren) - Employee Payroll Deduction

Employee Plus Spouse - Employee Payroll Deduction Employee Plus Family - Employee Payroll Deduction

None

Less than $50

$50 to $100

$101 to $150

$151 to $200

$201 to $250

$251 to $300

$301 to $400

$401 to $500

$501 to $600

$601 to $750

More than $750

None

Less than $50

$50 to $100

$101 to $150

$151 to $200

$201 to $250

$251 to $300

$301 to $400

$401 to $500

$501 to $600

$601 to $750

More than $750

None

Less than $50

$50 to $100

$101 to $150

$151 to $200

$201 to $250

$251 to $300

$301 to $400

$401 to $500

$501 to $600

$601 to $750

More than $750

None

Less than $50

$50 to $100

$101 to $150

$151 to $200

$201 to $250

$251 to $300

$301 to $400

$401 to $500

$501 to $600

$601 to $750

More than $750

14.4%

17.5%

16.1%

17.5%

6.5%

7.1%

12.3%

7.8%

3.9%

5.2%

5.8%0.6%

0.0%

0.0%

1.1%

1.1%

1.1%

2.3%

5.7%

19.0%

12.3%

1.9%

7.7%

6.9%

6.3%

12.5%

8.8%

10.0%

8.1%

11.3%

6.9%

4.4%

1.9%

5.6%

6.5%

1.9%

12.3%

13.0%

9.0%

3.2%

7.1%

6.5%

6.5%

5.2%

12.9%

11.6%

20.7%

33.9%


Annual Percentage of Premium Employer Contribution for the Medical Plan with the Most Enrolled Participants.

Employee Only - Percentage of Premium Contribution

Employee Plus Dependent - Percentage of Premium Contribution

Employee Plus Family - Percentage of Premium Contribution

7.6%

30.3%

13.0%

4.3%6.5%

3.8%

Lessthan25%

25%to

40%

41%to

55%

56%to

70%

71%to

85%

86%to

99%

100%

34.6%

17.4%

13.8%

4.2%

7.8%

10.8% 9.6%

Lessthan25%

25%to

40%

41%to

55%

56%to

70%

71%to

85%

86%to

99%

100%

36.5%

16.5% 15.9%

4.9%6.1%

13.4%

6.7%

Lessthan25%

25%to

40%

41%to

55%

56%to

70%

71%to

85%

86%to

99%

100%

36.6%


Annual Fixed Dollar Amount Employer Contribution for the Medical Plan with the Most Enrolled Participants.

Employee Only - Fixed Dollar Contribution

Employee Plus Dependent - Fixed Dollar Contribution

Employee Plus Family - Fixed Dollar Contribution

26.1%

6.5%

17.4%

8.7%

2.2%4.3%

6.5%6.5%4.3%

17.4%

Lessthan

$5,000

$5,000to

$5,999

$6,000to

$6,999

$7,000to

$7,999

$8,000to

$8,999

$9,000to

$9,999

$12,000to

$13,999

$10,000to

$11,999

$14,000to

$15,999

$16,000or

more

27.1%

4.2%

22.9%

4.2%

8.3%6.3%

0.0%

4.2%4.2%

18.8%

Lessthan

$5,000

$5,000to

$5,999

$6,000to

$6,999

$7,000to

$7,999

$8,000to

$8,999

$9,000to

$9,999

$12,000to

$13,999

$10,000to

$11,999

$14,000to

$15,999

$16,000or

more

19.2%

0.0%

7.7%

3.8% 3.8%1.9%

7.7%9.6%

19.2%

26.9%

Lessthan

$5,000

$5,000to

$5,999

$6,000to

$6,999

$7,000to

$7,999

$8,000to

$8,999

$9,000to

$9,999

$12,000to

$13,999

$10,000to

$11,999

$14,000to

$15,999

$16,000or

more

Key

COPAYS, COINSURANCE, AND DEDUCTIBLESIn-Network PCP and Specialist Copayment Amounts for the Medical Plan with the Most Enrolled Participants.

The copayment (copay) amount for nonprofit medical plans is most often between $20 and $35 for a primary care physician (PCP), as reported by 75.1% of surveyed nonprofits. For a specialist, the copay is most often between $40 and $45, as reported by 33.3% of surveyed nonprofits.

None of our participants reported a copay of more than $60 for a PCP, and only 6.4% reported that their copay was this high for a specialist.


PCP

Specialist

Less than $20

$20 to $25

$30 to $35

$40 to $45

$50 to $55

More than $60

16.8%

6.4%

3.7%

0.0%

22.4%

16.0%

36.6%

38.5%

4.3%

15.4%

33.3%

6.4%

In-Network PCP and Specialist Coinsurance Amounts for the Medical Plan with the Most Enrolled Participants.

The coinsurance amount for nonprofit medical plans is often less than 10% for both primary care physicians (PCPs), as reported by 38.9% of surveyed nonprofits, and specialists, as reported by 39.3% of surveyed nonprofits.

Less than 10%

10% to 15%

20% to 25%

30% to 35%

40% to 45%

50% to 55%

38.9%

14.0%

0.9%

0.0%

5.6%

6.5%

24.1%

14.8%

6.5%

21.5%

1.9%

0.0%

70% or more

60% to 65%

11.2%

39.3%

10.2%

4.6%

0.0%

Key Key

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999PCP

Specialist

Annual, In-Network Deductible for the MEDICAL PLAN with the Most Enrolled Participants.


PPO Plan - Annual, In-Network Deductible POS Plan - Annual, In-Network Deductible

HMO Plan - Annual, In-Network Deductible EPO Plan - Annual, In-Network Deductible

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999

$0

$1 to $999

$1,000 to $2,499

$2,500 to $3,999

$4,000 to $5,499

$5,500 to $6,999

$7,000 to $8,999

$9,000 to $14,999

20.7%

32.6%

0.0%

0.0%

3.3%

8.7%

14.1%

20.7%

9.7%

38.7%

0.0%

0.0%

6.5%

4.8%

11.3%

29.0%

11.9%

44.8%

0.0%

0.0%

1.5%

7.5%

19.4%

14.9%

14.9%

34.0%

2.1%

2.1%

2.1%

4.3%

14.9%

25.5%


Annual, IN-NETWORK Deductible for the DENTAL PLAN with the Most Enrolled Participants.

Annual, OUT-OF-NETWORK Deductible for the DENTAL PLAN with the Most Enrolled Participants.

$0

$1 to $24

$25 to $49

$50 to $99

$100 to $149

$150 to $199

$200 to $249

$250 to $299

$300 or more

$0

$1 to $24

$25 to $49

$50 to $99

$100 to $149

$150 to $199

$200 to $249

$250 to $299

$300 or more

33.5%

12.7%

3.8%

1.3%

0.6%

3.2%

1.9%

38.6%

0.7%

7.0%

8.5%

47.2%

3.5%

10.6%

4.4%

12.0%

0.0%

10.6%

What’s the difference between copays, coinsurance, and deductibles?

Copays/ Copayments

Definition

A fixed amount you pay for healthcare services that is typically paid at the time of service. Copayments vary by plan and can change depending on the type of care you receive.

Example

The copayment you owe when you visit your primary care physician (PCP) might be $25. However, your copayment may be higher if you go to the emergency room, to a specialist, or to an out-of-network doctor.

Coinsurance

Definition

Your share of the cost of a covered health care service, calculated as a percentage of your plan’s allowed amount for that service. You will start paying coinsurance once you’ve met your plan’s deductible.

Example

If your health insurance or plan’s allowed amount for an office visit is $100 and you’ve already met your deductible, your coinsurance payment of 20% would be $20. The health insurance or plan will pay $80.

Deductibles

DefinitionThe amount you owe for health care services before your health insurance or plan begins to pay.

Example

For example, if your deductible is $2,500, you will pay 100% of the cost of covered health care services until you’ve paid $2,500. After that, you’ll share the cost with your plan through copays and coinsurance. The deductible may not apply to all services.


PRESCRIPTIONSPrescription Drug Plans.

The majority of surveyed nonprofits offer a three tier prescription drug plan to employees, as indicated by 66% of participants.

Plan pays once deductible is met

12.3%Single tier

4.3%

Two tiers8.6%

Three tiers66.0%

Four tiers8.6%

What do prescription drug tiers mean?

Drug tiers divide prescription drugs into different levels of cost. Drugs in Tier 1 will be the least expensive, while drugs in Tier 4will be the most expensive.

Single Tier Plan: Payment is the same regardless of the drug.

Two Tier Plan: Prescription drugs will typically be grouped into two levels of payment:

• Tier 1: Low cost, generic drugs

• Tier 2: Higher cost, brand-name drugs

Three Tier Plan: Prescription drugs will typically be grouped into three levels of payment:


• Tier 2: Intermediate cost for specially selected brand-name drugs

• Tier 3: Highest cost for specially selected brand-name drugs

Four Tier Plan: Prescription drugs will typically be grouped into four levels of payment:


• Tier 2: Intermediate cost for specially selected brand-name drugs

• Tier 3: Higher cost for specially selected brand-name drugs

• Tier 4: Highest cost for specially selected brand-name drugs

First-Tier Drugs Often includes generic medications.

Second-Tier Drugs Often includes preferred brand name medications.

Third-Tier Drugs Often includes non-preferred brand name medications.

Fourth-Tier Drugs Often includes specialty medications.

First-TierDrugs

Second-TierDrugs

Third-Tier Drugs

Fourth-TierDrugs

SpecialtyDrugs

80.7%

50.0%

67.6%

19.1%

22.6%

17.1%

52.6%46.8%

15.8%

10.3%

20.0%

10.0%

10.0%

10.5%

10.5% 10.5%

18.5%

6.5%

First-TierDrugs

Second-TierDrugs

Third-TierDrugs

Fourth-TierDrugs

SpecialtyDrugs

20.0%

80.0%

20.0%

60.0%20.0%

37.5%

50.0%51.9%

25.0%

33.3%33.3%

37.5%

16.7%

14.8

Less than $20$20 to $39$40 to $59$60 to $79$80 to $99$100 or more


30-day Supply (Retail) Copayment Amounts for the Prescription Drug Plan with the Most Enrolled Employees.

30-day Supply (Retail) Coinsurance Amounts for the Prescription Drug Plan with the Most Enrolled Employees.

Less than 40%40% to 89%90% to 100%

Key KeyKey

Statistics less than 5% are not labeledStatistics less than 5% are not labeled

Key

Key

INSIGHT: Nonprofits Growing Less Confident in their Understanding of Healthcare Reform (ACA)

27.2%

14.8%

38.3%

14.8%

4.9%

7.4%

12.9%

16.0%

56.4%

7.4%

Understanding Healthcare Reform (ACA). More than 50% of nonprofits report that they have “very little” to “no” understanding of how Healthcare Reform (ACA) and its reporting requirements apply to their organization.

Cost of Healthcare Reform (ACA) Compliance. 56.4% of nonprofits have not yet calculated the cost of compliance with Healthcare Reform (ACA). This number has decreased slightly over the last year, from 60.5% in 2014.

Raises expenses less than 5%Raises expenses 5% to 10%Raises expenses more than 10%It will not raise expensesHave not calculated the cost

Extremely thorough understandingVery thorough understandingModerate understandingVery little understandingNo understanding

Nonprofits reporting a VERY to EXTREMELY thorough understanding of Healthcare Reform

10

20

30

40

50

60

70

802014

2015

0

10

20

30

40

50

60

2014

2015

Nonprofits reporting VERY LITTLE to NO understanding of Healthcare Reform

Perc

enta

gePe

rcen

tage


COMPLIANCE

How can you learn more about Healthcare Reform (ACA)?

Check out our Healthcare Reform Kit at: ppibenefits.com/HCR-Kit.

The kit includes:

• Employer Action Overview, including how PPI can help• Healthcare Reform Timeline• Employer Mandate Flowchart• Summary of the Impact on Employees• And more!

44.5%

45.0%

PPI Benefit Solutions 2015 Nonprofit Employee Benefits Survey Page 26

Cost-Saving Strategies in Response to Rising Costs.

We have already implemented this

We plan to implement this in the next year

We plan to implement this in the next 3 years

We plan to implement this at some point but we aren’t sure when

We do not plan to implement this

“Increasing employee contributions,” “offering a high deductible medical plan (HDHP),” and “implementing or expanding a wellness program with incentives” are among the top cost-saving strategies implemented by nonprofit employers in response to rising healthcare costs. These results are consistent with those of 2014.

Among the least likely cost-saving strategies are “reduce or eliminate dependent coverage,” “restrict eligibility for coverage,” and “offer a Minimum Value plan only.”

Key

Wellness incentives

Consolidate administration

Offer a Minimum Value plan ONLY

Replace some benefits withemployee-paid voluntary plans

Change to a defined contribution model

Move to a private exchange marketplace

Restrict eligibility for coverage

Extend the new hire waiting period

Offer a high-deductible medical plan

Reduce or eliminate dependent coverage

Reduce or drop certain benefits

Increase employee contributions 41.8% 15.8%11.0% 6.8% 24.7%

15.8% 9.8%9.0% 7.5% 57.9%

5.6% 82.5%7.1%

38.7% 17.6%5.6% 34.5%

7.7% 81.5%6.9%

12.6% 79.5%

6.3% 88.3%

11.9% 71.4%9.5%

10.5% 70.2%12.9%

10.4% 82.4%

15.2% 8.0%7.2% 67.2%

20.6% 26.0%9.2% 13.7% 30.5%


42.0%50.9%

5.9%

0.6% 0.6%

79.1%

20.9%Key

Key

PPI Benefit Solutions 2015 Nonprofit Employee Benefits Survey Page 27

Compliance with State and Federal Regulations.

More than 90% of nonprofits are “very” to “extremely” confident that their benefit plans are compliant with state and federal regulations. Only 1.2% are “slightly” to “not at all” confident.

Extremely confidentVery confidentModerately confidentSlightly confidentNot at all confident

Very likelyModerately likelyNot at all likely

Likelihood to Discontinue Healthcare Benefits and Send Employees to a State or Federal Healthcare Exchange.

Almost 80% of surveyed nonprofits are “not at all likely” to discontinue healthcare benefits and send employees to a state or federal exchange.

Nonprofits who plan to move to a private exchange marketplace

10

15

20

2014

2015

60

80

100

2014

2015

Perc

enta

gePe

rcen

tage

Why Are More Nonprofits Considering Private Exchange Marketplaces?

• Defined contribution funding allows for more predictable cost control

• Retail-like shopping experience with extensive plan choice

• Decision support and educational tools

• Reduced administrative burden on human resources departments

INSIGHT: Nonprofits Show a Slow, but Steadily Growing Interest in Private Exchange Marketplaces

Nonprofits who DO NOT plan to move to a private exchange marketplace

8.2%

9.8%


CONCLUSION

2015 Trend Opportunity for Nonprofit Employers

Nonprofit employers are struggling to understand and maintain compliance with the complex tracking and reporting requirements put in place by the Affordable Care Act (ACA).

Gain a better understanding of the Affordable Care Act (ACA) and develop a plan to comply with 2015/2016 requirements.

• Look to your benefits administrator or broker for ACA information and service solutions

• Leverage data collection and reporting from Benefits, Payroll, and HRIS systems

• Access PPI’s Healthcare Reform Kit at ppibenefits.com/HCR-Kit

Consumer directed health plans (CDHPs) and tax advantage spending accounts continue to gain momentum among nonprofit employers.

Consider the cost benefits and higher deductibles offered by consumer directed health plans (CDHPs) and tax advantage spending accounts.

• Assumes that employees are better managers of their overall healthcare expenses and encourages careful consideration of costly procedures

Voluntary, employee-paid benefits are growing in popularity as attractive, supplemental benefit options.

Adding employee-paid, voluntary plans to benefits packages may encourage enrollment in consumer directed health plans (CDHPs) and reduce employees’ overall out-of-pocket expenses.

• Offers employees more choice, at little to no expense for the employer

• Aids in employee retention efforts

Benefits administration services, such as online employee self-service, are increasing in prevalence as nonprofit employers struggle with the volume of data they must maintain to comply with new regulations.

Evaluate the option of switching to online employee self-service to lessen the strain on human resources and offer employees a more favorable enrollment experience.

• Eliminates time-consuming, inefficient, and tedious paper processes

• Increases security of employees’ personal and identifiable information

• Employees gain access to a 24/7 enrollment portal with benefits information

Key

The 2015 Nonprofit Employee Benefits Survey was conducted over a period of four weeks, beginning March 9, 2015 and ending April 3, 2015. A total of 299 responses were received, representing a 16% increase over last year’s participation. The majority of responses were submitted by human resources professionals at mid-sized private nonprofits located in northeastern United States.

OVERVIEW OF PARTICIPANTS

Nonprofit Location.

Company Size.

501(c) Classifications.


91.9%

2.3%0.8%

3.1%1.9%

Less than 20 employees20 to 49 employees50 to 199 employees200 to 500 employeesMore than 500 employees

46.1%

15.9%18.2%

10.5% 9.3%

86.7%

13.3%

Key

NortheastMidwestWestSouthSouthwest

Key

501(c)(3) - Charitable Organizations (Public Charity or Private Foundation)All other 501(c) classifications

Nonprofit Classifications. Participant Job Title.


Benefits Manager/ Director/Coordinator

CFO/Controller/ Director of Finance

COO/Operations Director/Manager

Executive Director/ President/CEO

Office Manager

Program Manager/ Director/Coordinator

Other

Human Resources Manager/Director/

Coordinator

13.3%

6.3%

48.0%

2.3%

6.3%

11.3%

1.2%

Human Services24.4%

Mental Health & Crisis Intervention

3.9%

Arts, Culture, &Humanities

3.1%Healthcare15.9%

Environment2.3%

Education15.5%

Volunteerism & Grant Making Foundations

2.7%Housing & Shelter5.8%

11.3%


ABOUT PPI

PPI Benefit Solutions, working exclusively through benefits brokers, helps smaller, mid-sized employers relieve the day-to-day challenges of managing an employee benefits program. With over 40 years of benefits administration experience working with nonprofit organizations, PPI leverages strategic relationships with a broad array of nationally recognized insurance carriers and powerful, web-based technology to provide a single solution for multiple carrier enrollments and eligibility processing (including online enrollment and employee self-service), electronic eligibility data and discrepancy management, true premium billing and payments, COBRA administration, and member advocacy services, all at little or no cost to the employer.

PPI (Professional Pensions Inc., dba PPI Benefit Solutions) is a subsidiary of NFP Corp. (NFP). For more information, visit www.ppibenefits.com.

Key Facts

Year Established............................................................................1967 PPI Employees...................................................................................55 Clients...................................................................................1,381 Covered Members....................................................................140,000 Annual Premium..............................................................$418 million

ABOUT THE SURVEY

Supporting the nonprofit community with insurance and service solutions that meet unique fiscal and management needs is a rich part of our history and value system. As a result, we continually strive to improve the way we support the benefit selection and management process.

In 2009, we recognized that most compensation and benefit surveys did not target smaller, private nonprofit organizations and offered very little benefits-specific data. We set out to close that gap and developed an annual survey that would help our nonprofit clients benchmark their benefit plans against organizations of similar size and location.

Each year, our Annual Nonprofit Employee Benefits Survey continues to grow in number of participants, and now reaches far beyond our own nonprofit client base. As the health care marketplace continues to evolve, PPI will continue to provide valuable insight into the fundamental concerns and challenges of nonprofit benefit plan sponsors.

This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. “PPI®” is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). Copyright 2015, Professional Pensions, Inc.

A: 10 Research Pkwy. Ste. 200, Wallingford, CT 06492 | P: 888.674.0046 | W: www.ppibenefits.com

AN ANNUAL RESEARCH REPORT BY PPI BENEFIT … ANNUAL RESEARCH REPORT BY PPI BENEFIT SOLUTIONS ... no referrals; expensive copays POS ... PPI Benefit Solutions …

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