News Elected officials urged to help self-insured nonprofits on unemployment

A coalition of associations that support direct service providers,  including the Providers’ Council, called Tuesday on state leaders to forgive — or at least defer — COVID-19-related Unemployment Insurance (UI) payments by self-insured nonprofit organizations.

Nonprofits employ 18% of the Commonwealth’s workforce, which translates into more than 550,000 jobs, many of which have been threatened by the COVID-19 pandemic.

The letter — written to Governor Charlie Baker, Senate President Karen Spilka and House Speaker Robert DeLeo and signed by 11 organizations — said that this “crisis is unprecedented — no one could have foreseen an instance where all or most of an organization’s workforce was laid off at once at a time when their services are needed the most.”

The federal CARES Act will reimburse nonprofits that self-insurance for unemployment half of the costs of benefits provided to their laid-off employees. The coalition is urging state lawmakers to cover the other half of those costs.

The letter praised state and federal relief measures, but said more must be done to help organizations who self-insured for UI claims. Those organizations could be held responsible for tens of millions of dollars in payments to the state each. It asked state leaders to hold self-insured businesses harmless from UI claims. It also asked for an automatic deferment of at least 120 days in payments owed to the state trust to give charitable nonprofits some financial relief in the short term.

The community-based human services sector cares for one-in-ten state residents and provides more than 180,000 jobs. According to a recent survey, 70% of human service providers reported that they are self-insured. More than 30 providers reported laying off nearly 1,200 workers to date, the letter said.

Read the full text of the letter here.

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