What a CEO Shooting Can Teach Nonprofits About Our Health Insurance Mess

In the wake of UnitedHealthcare CEO Brian Thompson’s murder, the public reacted with nearly universal frustration and anger with the US health insurance industry, and, in many cases, sympathy for the killer’s motivations. This spontaneous, widespread reaction to such a horrific act is a damning comment on how Americans experience health insurance.

Another telling event? In September, more than 10,000 hotel workers in 11 US cities—including San Jose, Boston, and Honolulu—went on strike. The biggest issue? “Preserved or improved” health benefits.

Most studies of the nonprofit sector have precious little data about the healthcare benefits that nonprofits provide.

But where do nonprofits fit in this? Nonprofits approach health insurance from multiple angles:

• Nonprofits collectively employ nearly 12.8 million individuals who need and expect health insurance from their employers.
• In turn, nonprofits struggle with rapidly rising costs and limitations of employee healthcare.
• Healthcare provision dominates the nonprofit sector economically—more than half of all nonprofit revenue is from healthcare and hospitals. This entire sector is made possible largely through public and private health insurance.
• Nonprofits are on the frontlines serving those suffering because they don’t have health insurance—sick people walking into free clinics and living on the streets, those excluded by complicated and discriminatory eligibility guidelines, and those afraid to go to health institutions.

Oddly, however, most studies of the nonprofit sector have precious little data about the healthcare benefits that nonprofits provide.

The Nonprofit Employment Data Project at George Mason University, for example, offers a great deal of valuable information about wage and employment trends but is silent when it comes to benefits.

In my home state of California, there is a survey conducted by Nonprofit Compensation Associates that includes some information on organizations’ health insurance, but it is proprietary. Some high-level findings from the 992 nonprofits surveyed: The average nonprofit reportedly paid $790 a month per employee in health insurance. While 94 percent of surveyed employers cover a portion of their employees’ premium, only 67 percent paid the entire premium. With dependents, the numbers are even more limiting—only 7 percent provided full coverage, and more than 60 percent provided no coverage whatsoever.

An Attempted Nonprofit Solution

In California, about 24,000 nonprofit employees obtain health insurance through CalNonprofits Insurance Services (CNIS)—a wholly owned subsidiary of the California Association of Nonprofits (CalNonprofits), where I was the CEO until recently. CNIS also offered free assistance to organizations that wanted to help their own staff enroll their dependents in Obamacare.

However, the gaps between “affordable costs” and the policies that are available on the market are enormous. It simply can’t be solved by just a few nonprofits coming together to economize on costs—or even by a nonprofit-owned insurance agency for a group of 24,000 staff.

There is a divide in our thinking. In the world of nonprofit and social movement, we find calls to expand coverage—for example, to resource healing justice work—based on “an understanding of how care, healing, and safety strategies are integral to liberation and inseparable from building power.”

When funders ask, “Do you provide employee health insurance?” nonprofit leaders say, “Yes,” but the real answer is often: Yes, but with gaping holes.

Yet in practice, far too often, instead of extending mental health coverage and ensuring equitable coverage for BIPOC and LGBTQIA+ employees, the nonprofits I know struggle to provide even much more limited healthcare coverage for their employees and their employees’ families.

One San Francisco childcare agency told me that their healthcare costs had gone up by roughly 10 percent in each of the past three years. Their CFO commented: “A heavy burden getting heavier, but employees appreciate it.”

And even people with employer-based health insurance suffer from denials of coverage for needed procedures and medications.

Are Nonprofits Part of the Solution or the Problem?

Unfortunately, nonprofit leadership and funders are a part of the problem, too. Partially, this is due to a lack of awareness that many nonprofit leaders and funders have, both about their own organizations and about the sector more broadly.

For example, only a handful of organizations took advantage of CNIS’s Obamacare enrollment assistance program. This is because most nonprofit employers are unaware of how many of their staff had uninsured dependents, or their staff members are part-time or seasonal workers who don’t qualify.

The best way to improve health insurance for nonprofit staff is to improve health insurance for everyone.

When funders ask, “Do you provide employee health insurance?” nonprofit leaders say, “Yes,” but the real answer is often: Yes, but with gaping holes.

Typically, nonprofit leaders and their funders are keenly aware of their own subsectors but unfamiliar with others. For example, people who work in childcare are aware of the difficulties that childcare workers have obtaining health insurance, but they may not realize that janitorial staff in affordable housing, drivers in meal delivery, nursing home workers, security staff in museums, and summer camp workers all may share some of the same problems with low wages and inadequate health insurance. Even among the most justice-oriented nonprofits, many do not pay the full premium for their own staff.

The Value of Solidarity

The best way to improve health insurance for nonprofit staff is to improve health insurance for everyone. Obamacare and Medicaid (called Medi-Cal in California) have made a huge difference in healthcare for hundreds of thousands of nonprofit staff and volunteers.

This is especially true for those staff who are ineligible for employer health insurance, such as part-time and temporary workers, and for the family members of covered employees. Foundations and nonprofits have a vested interest in supporting both, yet both efforts are typically seen as helping “others.”

As nonprofit staff and volunteers, we are in the same disgruntled and sometimes desperate state of the US public in general. The system is not working for our organizations, our staff, or the people we serve.

It’s time to broaden our focus and embrace the task of advocating for better healthcare coverage, not just for our own staff and volunteers, but for everyone. It’s time to get moving.