Reduce Unemployment Tax Funding for 501(c)(3) Organizations And Improve Your Cash Flow

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1 Reduce Unemployment Tax Funding for 501(c)(3) Organizations And Improve Your Cash Flow To learn more how to reduce your Unemployment Tax Funding and improve your cash flow contact Rich Skorupski ext 23 or or CLICK HERE TO COMPLETE A ONE PAGE ONLINE FORM TO DETERMINE YOUR COST SAVINGS

2 Why Are UI Taxes Are Important To You? In the current economic environment nonprofits are struggling because fundraising has become more difficult plus government or foundation grants are being reduced. In NJ payment is shifting from reimbursement to fee for service. In the past, nonprofits would get a contract from the state, and the state provided much of its funding. With the fee for service model nonprofits have to compete more effectively, focus more on cost containment, and better control cash flow.

3 Why do UI taxes matter to you? Our unemployment insurance trust fund is broke. We're over a billion dollars in debt to the federal government." Assemblyman Jay Webber (R Morris) The NJ Department of Unemployment s Taxable Wage Base increased again to $30,900 in 2013 and is the 7th highest in the country. NJ has one of the country s highest unemployment tax rates and it is projected to increase.

4 Why does it matter to you? NJ has to borrow from the federal government to pay unemployment benefits. And, it has to pay it back by increasing UI payments from employers. Nationwide nonprofits average $2.20 in taxes for every $1 in UI claims. Many nonprofits pay into the system, and their funds end up subsidizing other businesses and nonprofits even if your organization has a low claims rate. So, everyone including nonprofits is overpaying their share.

5 You Have Funding Options 501(c)(3) non profits are allowed two options to fund unemployment benefits Pay through the State Tax Fund Become a reimbursing employer Self insure unemployment benefits and pay the State monthly Participate in risk pool, trust, or insure through a 3 rd Party

6 Pros and Cons of paying the SUI Tax Fund Fixed cost that can be projected annually based on payroll No risk beyond assigned tax rate Budget predictability If claims exceed your taxes, the state covers them (but expect a tax increase in following years). The fund sets rates based on its solvency Rate increases occur even if your experience improves Cash flow impacted by large annual payment Your nonprofit subsidizes private sector claims, which tend to have higher unemployment Your funds are in a non refundable state reserve account.

7 What choice is the best fit? The reimbursement option works best if your nonprofit has: Stable employment and comparatively low unemployment claims based on the size of the organization An annual gross payroll of $1M or more More than 40 full time employees No large staffs cuts planned in the near future

8 What choice is the best fit? The reimbursement option is not best if your nonprofit is: Planning a sizeable staff reduction in the next 6 12 months. Currently and in the past at the top of the state rate scale for unemployment taxes Only staffing fewer than 40 employees. Hiring seasonal staff that regularly collects unemployment benefits

9 Meeker Sharkey offers a new program from The Nonprofit Trust that is endorsed by the Philadelphia Insurance Company the largest insurer of nonprofits in the US.

10 Nonprofit Trust Members Save 40% 50% Trust members save 40% 50% per year on UI costs Trust members build reserve accounts owned by the members The Trust issues quarterly deposit invoices but some members pay nothing some years depending on the balance in their reserve account, which unlike the SUI system, is owned by the Trust member. Professional services from our Claims Administrator further reduce HR costs and saves time

11 Your money is protected Members principal is secure in cash and FDIC insured money market accounts not in high risk equities Your organization is no longer subsidizing others who have high claim rates Reserve account is owned by your member organization, not the State You determine how much you want to reserve based on your experience and projections Other programs include expensive stop loss insurance that is rarely needed. We offer an alternative to protect you without hurting your bottom line.

12 How else do we help you save money? Assist with all claims handling Reduce staff time spent on claims and unemployment claims processing Audit all claims to correct overpayments which reduces member costs Attend all hearings on behalf of the member organization for no extra cost

13 We fight disputed claims for you and win The State has a high rate of overpaying unemployment claims. Many nonprofits don t have the staff to spend time disputing claims. And, the state is understaffed, so they are slow to respond. When a nonprofit has the capability to dispute these inflated claims, they will also improve cash flow. With the support of our vendors, we have a 92% win ratio on disputed claims versus the typical 50% if you handle them yourself. In 2010 NJ overpaid $370M in claims!

14 Dedicated Claims Administrator Your Claims Administrator works for you, not the State You can access our Human Resources Hotline at no extra charge the help is not limited to just UI questions We represent and advise your agency on all unemployment issues

15 It Is Easy to See How Much You Save Just complete a one page form CLICK HERE

16 To learn more how to reduce your Unemployment Tax Funding and improve your cash flow contact Rich Skorupski ext 23 or