Benefits for nonprofit organizations that have to make a tight budget do real work

Ares Benefit Group works with nonprofit organizations in this size range. We compare a group plan, an ICHRA, and a QSEHRA, and we will look at the tax credit when the organization may qualify.

This page is for the organization as an employer. Faith-based employers that may also be churches or ministries should also read churches and ministries.

How nonprofits actually staff

• A small, mixed team. Program, fundraising, and administration may all sit in one office, or they may be split between an office and field sites. An ICHRA can use work-location or full-time classes when that helps. A local group plan can still be the cleaner fit.
• Part-time program staff and grant-funded roles. Eligibility should be written so it still works if a grant ends. Hours still count. See part-time employee benefits.
• The tax credit for eligible tax-exempt employers. The IRS credit generally requires fewer than 25 full-time equivalents, average wages below an inflation-adjusted limit, a qualifying arrangement that pays at least 50% of employee-only premiums, and (with limited exceptions) a qualified plan offered through SHOP. For eligible small tax-exempt employers the maximum credit is 35% of premiums paid, claimed on Form 990-T, and it is available for two consecutive taxable years. See the tax credit page.
• Defined-contribution budgets. Boards often want a known monthly number. An ICHRA or QSEHRA is built for that. A group plan can still be the right answer when you want one employer-sponsored plan and you can meet the rules.

Structures we compare for a team this size

For a nonprofit this size, we usually compare a SHOP or other group plan — especially if the tax credit may apply — with an ICHRA or QSEHRA when the board wants a fixed contribution and the credit is not the driving factor.

• SHOP and other group coverage, when you want one employer-sponsored medical plan and you can meet eligibility and participation rules.
• A level-funded arrangement, when a carrier offers one for your census. We compare it with fully insured group coverage and do not treat either as automatically better.
• An ICHRA, when you want a set contribution and employees choose individual coverage. Permitted classes include full-time, part-time, hourly or salaried, work location, and a waiting period. It is for employees, not for a self-employed owner.
• A QSEHRA, when you are not an applicable large employer and you are not offering a group health plan. See ICHRA vs QSEHRA if both are on the table.
• Section 125 for pre-tax employee premium contributions on a group plan. A QSEHRA cannot be funded by salary reduction.
• Group life and disability and voluntary benefits.

A company under 50 full-time employees, including full-time equivalents, is generally not required by federal law to offer health coverage. If you have fewer than 25 full-time equivalents and you meet the wage, contribution, and SHOP rules, look at the Small Business Health Care Tax Credit.

What to send us

A roster, hours, sites, tax-exempt status (including the Code section if you know it), and whether you already offer a group plan. We are not your tax preparer; we will work alongside the person who files Form 990-T if the credit is in play.

Tell us about your organization

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