Small 501(c)3 looking to establish Benefit Program

[Guest Nicholas]

Greetings-

I am the CFO for a nonprofit in LA, California. My Foundation currently has 7 employees and needs to establish a Health, Eye, Dental and possibly a 401k plan. Looking for advice from individuals who have crossed this bridge (and lived to tell about it!)

This is a small Nonprofit, are there special groups (coalitions) that provide employee benefits for the nonprofit community?

What about going directy to Pacificare, Kaiser, Blue Cross ect? Is there benefit to going through as "broker"? There are thousands of Brokers, how do you decide?

Any advice would be greatly appreciated!

Nick Batch

[leevena]

Hello fellow SoCal. Obtaining benefits should not be that much of a problem for you, assuming the employees are on the books and being paid. Small Groups 2-50 are guaranteed issue in California, so you do not really need to look for anything special.

As for whether to use a broker or not, that is up to you. My suggestion would be to use one. Two reasons come to mind. The first is that rates/benefits do not change whether you go direct or use a broker. The second is that is appears from your question that you do not have anyone on staff who has the background to review all the options available to you. So since it will not cost you to use a broker, go ahead and use one.

As for how to decide, that is up to what you are looking for in a broker. Again, looking at your question, you may want someone who can evaluate all of the options available and make a recommendation based on what your requirements/needs are. If a broker is just going to shop price, I would stay away from them.

Good luck.

[Larry M]

With respect to the medical plans, I agree with Leevena, although I do wonder why an employer needs to spend money to provide eye and dental benefits to employees when these are relatively small ticket items which may be provided on a more efficient manner outside of the insurance framework.

With respect to a 401(k) or any other qualified retirement plan, I suggest you consider going to a qualified consulting actuary or pension advisor who is not on a commission basis and is not tied to any financial institution.

There are many options available to your non-profit and a 401(k) may or may not be the most appropriate for your firm.

The qualified retirement plan is a long term benefit and one which should be entered into carefully. It will be well worth your firm's goals to spend a few hours of the consultant's time in order to learn the differences among them; the advantages and disadvantages of each; and the options available within each form of plan.

Once you have decided upon the plan or plans which best fit your needs and finances, the consultant can help you install and administer the plan.