Allies for Health + Wellbeing is a nonprofit healthcare provider in Pittsburgh, Pennsylvania. Allies offers integrated medical care, support services, and community-based education to people living with, or at risk of, HIV, viral hepatitis, and sexually transmitted diseases. The organization's employees improve thousands of lives each year through holistic care free of stigma and discrimination.
As a nonprofit organization, Allies for Health + Wellbeing relies on grants, foundation dollars, and individual sponsorship to keep things moving. However, with no guarantee that funding will continue from one year to the next, Allies must build flexibility into their budget to allow for sudden drops in income.
Despite the financial uncertainty, Allies for Health + Wellbeing is committed to offering its employees generous healthcare benefits. Not only does the organization want to take care of its dedicated team, but it also needs to attract skilled employees who could likely earn higher salaries elsewhere.
Our biggest expense by far is personnel costs, and a big piece of that is benefits, explained Carrie Reighard, chief financial officer at Allies for Health + Wellbeing.
"As a nonprofit in the healthcare space, we just cannot provide the salaries that would be competitive with other medical practices. Our medical providers would make more anywhere else."
The Challenge: A 47% renewal quote pushes Allies to breaking point
The Allies workforce, which includes individuals living with HIV and other staff members managing medical conditions, relies heavily on its health insurance. The nonprofit previously offered healthcare benefits through a single UPMC group plan, covering the entire monthly premium for each employee in addition to most children's costs.
Allies had a healthy relationship with its group plan provider — UPMC Health Plan sponsors the nonprofit and, for several years, shouldered losses on their behalf. However, with high usage driving up costs, this became unsustainable even for the insurance company. Allies was hit with a 30% premium increase two years in a row, forcing Reighard and the rest of the C-suite to make tough financial decisions.
We wanted to keep the same plan; our employees were counting on it," said Reighard. "That meant we had to trim services and cut positions to maintain the benefit levels.
Everything changed the following year when UPMC quoted Allies a 47% renewal increase. It was completely cost-prohibitive and, with few options remaining, the nonprofit's future was left hanging in the balance. "We did not know what to do," shared Reighard.
We could either drastically cut benefits that employees used heavily and didn’t have salaries to cover higher deductibles or out-of-pocket costs, or we could cut service lines or lay off staff.
The Solution: Switching to ICHRA "saved our company."
Allies was in crisis mode with the C-suite meeting every day in search of a solution. The breakthrough came when Henderson Brothers, a local insurance broker, introduced Allies to the individual coverage HRA (ICHRA). With ICHRA, employers allocate tax-free dollars for employees to spend on individual insurance premiums and eligible medical expenses. Allies would gain complete control over their healthcare spend — no unpredictable renewals or penalization for high usage.
It was a huge relief for Reighard and the team. Even with an extremely generous per-employee allowance, ICHRA promised significant savings. Allies moved quickly, switching off its group plan and setting up the HRA with Take Command — the nonprofit can now cover the full cost of individual premiums with even lower deductibles than their previous group health plan.
In the first year of our switch to the ICHRA plan, we are on track to save $550,000," said Reighard. "Based on the quote we initially received from our employee-sponsored-plan health insurance provider, we will save about $950,000 during our second year — about $1.5 million in savings in two years.
The Results: Better benefits, reduced admin
Before ICHRA, everyone at Allies was on the same UPMC group plan despite differing healthcare requirements. Employees could either take it or leave it, with no room for personalization. Now, employees can choose different carriers that cover the providers and specialists they need to access in their local area. They can also balance deductibles, coinsurance, and copayments to meet their budget and healthcare usage.
Allies has enjoyed a smooth transition from group insurance to ICHRA. With support from Take Command, Allies' staff can navigate the individual insurance market with confidence and make informed decisions around healthcare. "There was a learning curve, but Take Command was there to offer individual calls with employees," said Reighard. "At the end of the day, employees are getting more money and more flexibility.”
Switching to ICHRA has eliminated the anxiety and stress that once surrounded healthcare benefits. Allies can continue to offer employees the quality benefits they deserve without risking the organization's financial stability. ICHRA has also reduced the administrative burden of health benefits. Now, when employees have questions about their insurance, they turn to Take Command instead of HR.
"For me as CFO, I have control over changes and no renewals to worry about," said Reighard. "We're able to offer better plans while freeing up dollars and administrative time.
About Allies for Health + Wellbeing
Allies for Health and Wellbeing is a Pittsburgh-based nonprofit that empowers individuals and communities through high-quality integrated medical care and supportive human services. From offering inclusive primary care to leading the way in holistic HIV treatment, with us, you always have an ally.
