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Non-Profit Benefit Fairness Question

igniteignite 2 Posts
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I have heard that 501(c)(3) companies are required to offer the same benefits to all employees. For example if one employee receives $50,000 of life insurance then everyone else has to get it also even if they're 80 years old. Or if one employee gets family health insurance coverage then so should everyone else even if they normally only get individual health insurance. Is this actually true? If so, are there any ways around this? Where could I find documentation that explains this? Thanks for any help...
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  • 3 Comments sorted by Votes Date Added
  • sonnysonny 2,117 Posts
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    I worked for a 501 3 (c) and life insurance equated to one's salary. So everyone's was different. . Never heard of what you are referring to.
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  • njjelnjjel 1,235 Posts
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    We are nonprofit and our administration group receives more life insurance and reimbursement for parking that staff.
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  • igniteignite 2 Posts
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    After talking to our accountant I believe I found the answer - companies can do what they want, but if one employee receives extra benefits that the rest of the company doesn't get then the employee has to pay tax on the difference. (Lookup tax information on "highly
    compensated or key employee(s)".) It's similar to the life insurance issue where if you get more than $50k worth of insurance then you have to start paying taxes on the extra amount (using some special formulas which I read about elsewhere in this forum).
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