Challenges Faced by Nonprofit Organisations while Purchasing Group Health Insurance

Nonprofit organisations are crucial in bringing about social change and providing community service in a diverse economy like India. These organisations, unlike the regular ones, are more likely to struggle with accessing basic amenities and require support. Due to the way they are funded, challenges faced by non-profit organisations while purchasing group health insurance for their employees are numerous and must be handled carefully.

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Financial Limitations

One of the main challenges faced by non-profit organisations while purchasing group health insurance is their monetary limitations. A lot of them find it difficult to gather funds for their basic needs, and perks like health insurance can seem like a luxury. It can be a major hindrance as health insurance is crucial for the well-being of employees and their families.

Moreover, with money from multiple donors and fundraisers, it becomes extremely difficult to track a precise turnover. NPOs also need help establishing long-term sustainability and finding new revenue streams, making it harder for them to opt for health insurance.

To overcome this challenge, nonprofit organisations can look for custom plans that offer comprehensive coverage at a lower cost. They can also reach out to potential donors or collaborate with other organisations to pool resources and purchase group health insurance.

Catering to Diverse Coverage Needs

Most NPOs have a diverse workforce of full-time staff, volunteers and part-timers. Each may have different health-related needs, making it impossible to craft a ‘one-for-all' plan for ensuring their well-being.

From young, healthy individuals to employees with chronic conditions, tailoring health benefits to various demographics is crucial. Flexible plan options and supplemental coverage can help address diverse needs like accidents, critical illness, preventive care and special diseases within budget constraints.

Complex Regulatory Landscape

Nonprofit organisations providing health insurance are subject to several regulations imposed by the government, such as employee benefit regulations, anti-discrimination laws and state-specific regulations. Compliance with nonprofit regulations is also crucial for maintaining tax-exempt status (It is important to note that Tax benefits are subject to change in tax laws).

Administrative Burden and Lack of Awareness

Another major challenge faced by non-profit organisations while purchasing group health insurance is their ability to hire limited staff and human resources. Managing administrative tasks such as purchasing and managing group health insurance can be challenging. It can be a major issue as it requires time and effort to research and compare different health insurance plans, enrol employees, and handle claims.

To overcome the several challenges faced by non-profit organisations while purchasing group health insurance, they can outsource the administrative tasks to a third-party administrator or insurance expert.

Why should Nonprofits Prioritise Employee Health Benefits?

Nonprofits should consider the alignment of health benefits with their overall mission. Offering preventive care options and promoting healthy lifestyles can improve employee well-being and reduce long-term healthcare costs. Also, the health of your employees is of paramount importance, irrespective of the kind of business you run. So, nonprofits need to balance the need for comprehensive coverage with budget constraints through creativity and strategic planning.

Example of How Group Health Insurance Helps Nonprofit Organisations Serve their Mission

Here is a hypothetical example to explain the role of GHI for nonprofit organisations:

Sneha's Dilemma

A dedicated social worker at the local animal shelter, Sneha, poured her heart into caring for abandoned animals. Her passion fueled her work, but like many nonprofit employees, she was worried about her health security. Sneha's previous employer didn't offer health insurance, leaving her reliant on a high-deductible individual plan, but the current employer ensured she was covered under a GHI.

One day, while playing fetch with a rescued dog, Sneha tripped and fell, experiencing excruciating pain in her ankle. Rushed to the emergency room, she received the diagnosis: a fractured tibia requiring surgery. The initial shock was compounded by the looming medical bills, threatening to wipe out her savings and derail her plans.

Fortunately, Sneha's new role at the animal shelter offered a lifeline - group mediclaim insurance policy. The group insurance plan, carefully chosen by the nonprofit to be affordable for employees like her, covered a significant portion of her surgery and hospital stay, allowing her to focus on healing and recovery. Knowing she was covered allowed her to prioritise her health and return to work quickly, minimising disruption to her job and the shelter's operations.

Conclusion

As healthcare becomes expensive every passing year, nonprofit businesses continue to find it difficult to provide group health insurance for their employees. But with health insurance being of utmost necessity, they just have to prioritize it. With the ever-changing dynamics and technological advancements, insurers are trying to find the perfect recipe to meet your needs. The key is to know what suits your workforce the best and find the right option that does not break the bank. Moreover, if you still haven't taken group health insurance for your non-profit organization, visit policybazaar.com today and find insurance policies for as low as INR 110 per month (per employee).

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Written By: PolicyBazaar - Updated: 01 March 2024

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