Nonprofit 411: How One Nonprofit Revolutionized Its Employee Healthcare

Callihan-headshot

By Nonstop Wellness

Patrick Callihan, executive director of Tech Impact, has made significant changes to his employees’ health insurance in an effort to reduce costs and improve benefits. Taking cues from the self-funding world, Tech Impact now uses a partially self-funded insurance approach that has stabilized premium costs and eliminated out-of-pocket expenses for his staff of 55.  Nonstop Wellness caught up with him to learn more.

Q: Why did Tech Impact begin moving away from the traditional insurance model?

A: For many years, my previous broker would come to me with double-digit increases and I would ask “what can we do creatively to avoid taking this hit?” So I began self-insuring pieces of our healthcare plan. It reduced the premium increase, but it also meant that as an organization we were taking on more risk. Because of our size I didn’t think we were in a position to self-fund entirely, so that model was not an option for us.

Q: What drew you specifically to the Nonstop Wellness model of partial self-insurance?

A: Moving to Nonstop Wellness meant our healthcare premiums remained stable, we could slow down healthcare inflation year over year, and we could provide better benefits to our employees with a $0 out-of-pocket insurance program. It’s a win-win for both Tech Impact and our staff, in that we experienced organizational cost-savings and our employees no longer pay copays, deductibles or coinsurance costs.

Beyond that, I was just really blown away by Nonstop’s financial model and how Nonstop Wellness is engineered. Nonstop has created a predictable algorithm that compares cost and actual usage of the plan. It’s an awesome business model that allows nonprofits to access the upside of self-insurance with none of the downside.

Q: How has moving to a partial self-insured approach supported Tech Impact’s business model?

A: We are growing quickly, so this has been a great recruitment tool. When I describe our healthcare plan to prospective employees, I often get a jaw drop. We pay 90 percent of premiums, so that, coupled with $0 out-of-pocket costs, means that employee wages stay stable each month. That is a huge win. For many people, this can be the difference between staying in the black or going into debt. There are no “gotchas” with Nonstop Wellness like there can be with other plans. It speaks to quality of life, something that is important to both me and my associates.

Q: What advice would you give to other nonprofits that are seeking an alternative to traditional health insurance?

A: My first reaction to Nonstop Wellness was that the model was too good to be true. But when you dig into the research and vetting process, the financials and logistics are quite sound. In addition, I really feel that Nonstop is our advocate when it comes to employee healthcare. It gives me a lot of confidence and comfort. Healthcare is a big line item for us, so having someone in our corner makes a difference. I’d encourage all nonprofit leadership to dedicate the time and resources needed to explore alternatives to the traditional fully insured model. There is nothing to lose and everything to gain.

Tech Impact’s mission is to empower communities and nonprofits to use technology to better serve our world by providing telecom, cloud migrations, data services, and managed IT services to nonprofits/NGO’s on a national and international scale. Tech Impact also offers workforce development programs for underrepresented communities in Philadelphia, PA, Wilmington, DE, and Las Vegas, NV. To learn more please visit www.techimpact.org.