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UST: Turning Insurance Payments into Investment Opportunities

Unemployment insurance can seem daunting. As a nonprofit, you have two choices: either place all those funds into the pooled liability state insurance plan, which often helps pay for the employment (mis)practices of every hiring entity in the state; or take the nonprofit-only option to reimburse unemployment costs directly, a path that can play havoc with your finances. 

That’s why Unemployment Services Trust (UST) was formed: to give nonprofits a safe and easy alternative to a cumbersome state-run insurance plan and the risky (not to mention onerous) self-reimbursement alternative. It’s an option that saves you money, gives you an individual account to track your unemployment funds (an asset, rather than a tax), and even provides an “experience refund” when it’s determined your funds exceed the benefits paid out. It also saves you effort and worry, giving you a team of experts to track your funds, file and manage claims, represent your organization at appeal hearings, and provide reliable answers to your HR questions.

“For most nonprofits, the number one benefit of UST membership is that we help stave off the cash volatility of reimbursing on their own,” says Donna H. Groh, UST’s executive director. That means a nonprofit can enjoy the stability of a collective plan without helping fund entities with constant turnover and unemployment payouts (not to mention the $10 billion in erroneous payments made by state unemployment plans in 2012 alone). Though Groh notes that state rates do, to an extent, reflect individual employers’ HR practices, the UST, by restricting the pool of players to responsible nonprofits, allows its members to cover themselves for far less. “New members immediately saved an average of $100 per full-time employee,” Groh says.

“UST gave us the assistance we needed to optimize our hiring, retention, and documentation procedures, and provided training to our managers who make personnel decisions. The result has been a dramatic decrease in costs for unemployment claims and an increase in employee retention.”
Sean Griffin, Humane Society of Greater Savannah

“Why would a nonprofit make a payment when they could literally build an asset for the future?” asks GCN CEO Karen Beavor, who became a member of the UST board in 2011. “The UST was set up by and for nonprofits to help us save money and build assets. It’s an amazing service, and I’m proud to be part of it.”

Expert, hands-on HR assistance

The Center for the Visually Impaired (CVI), a UST member since 2006, saw several thousand dollars in savings in its first few years with the plan. Those savings are no anomaly, says Groh, reporting that nonprofits typically enjoy a 25% to 60% savings compared to the state tax rate.

CVI Senior Vice President Bill Woolf said signing with UST just made sense: “Joining with a group of similar organizations, where our long-term unemployment insurance costs would be based on actual experience, seemed quite logical, given the relatively low number of claims we normally have.”

Even when changes in state funding forced them to make layoffs, Woolf said that CVI “came out ahead as compared to Georgia’s general unemployment compensation pool,” which took a “huge hit” following the recession. “We saved several thousand dollars during the first few years,” said Woolf.

Sean Griffin, office manager at the Humane Society of Greater Savannah, trumpeted UST’s performance-raising consultation and training: “UST gave us the assistance we needed to optimize our hiring, retention, and documentation procedures, and provided training to our managers who make personnel decisions,” he said. “The result has been a dramatic decrease in costs for unemployment claims and an increase in employee retention.”

“UST isn’t just a service, it’s a partnership.”
–Donna Groh, Executive Director, UST

A partner, not a service

Since 1983, UST has been saving nonprofits money and hassle, turning the money pit of unemployment insurance taxes into a smart investment—and returning more than $35 million in refunds to participating nonprofits.

“UST isn’t just a service, it’s a partnership,” says Groh. UST puts that partnership into action through education opportunities, help with strategic staff planning, online interactive training, and other HR-enriching programs.

Nonprofits with ten or more employees and a “reasonable history” of unemployment claims who want to partner up with the nation’s largest nonprofit unemployment trust can find out more, get a savings quote, and start the application process at www.chooseUST.org. To contact UST directly, email them at [email protected] or call 1-888-249-4668.

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