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October 2026

Oct 05

Volunteers, Employees and Medicaid: What Indiana Nonprofits Need to Know This Fall

By Feature

Including a list of helpful resources for nonprofit leaders

By Morgan Riley, Charitable Advisors

Two developments are putting volunteering on the radar for Indiana nonprofits this fall—but for very different reasons.

The U.S. Department of Labor (DOL) recently issued guidance clarifying when nonprofit employees may also volunteer for their employers. At the same time, Indiana is preparing to implement new Healthy Indiana Plan (HIP) work requirements, which will allow certain Medicaid recipients to count community volunteer hours toward maintaining coverage.

For nonprofits, understanding what qualifies as “volunteering”—and when volunteer hours are appropriate—is more important than ever.

The two issues are separate, but both have crucial practical implications for nonprofit organizations.

  1. Can your employees volunteer for your nonprofit?

On Sept. 7, 2026, the U.S. Department of Labor (DOL) issued Opinion Letter FLSA2026-12 clarifying when FLSA-exempt nonprofit employees may volunteer for their employer outside normal work hours (U.S. Department of Labor, 2026a).

The guidance says employees may volunteer if the service is offered freely, without pressure or coercion, and is neither the same nor similar to the work they are employed to perform. Employees cannot designate regular job duties as “volunteer” hours or waive their FLSA right to compensation by agreeing to perform their regular work as a volunteer (U.S. Department of Labor, 2026a).

The guidance reinforces longstanding DOL policy that paid nonprofit employees generally cannot volunteer to perform the same type of services for which they are employed (U.S. Department of Labor, 2015).

Who should pay attention?

This guidance is particularly relevant to nonprofits that:

  • Employ FLSA-exempt staff who also volunteer with the organization.
  • Encourage or expect employees to volunteer at organizational events.
  • Have employees who participate as volunteers in programs or services.
  • Use volunteer hours to supplement staffing.
  • Have policies or informal practices that blur the line between paid responsibilities and volunteer activities.
  • Have employees who want to volunteer for the organization in a substantially different capacity.

A useful starting point: If an employee is performing the same type of work for the organization that they are employed to perform, the organization should not assume that calling those hours “volunteer” makes them unpaid volunteer time. The DOL emphasizes that volunteering must be freely chosen and that the work must be different from the employee’s regular job duties (U.S. Department of Labor, 2026a).

Resources:

Important: This is federal labor guidance, not legal advice. Organizations with questions about a particular employee/volunteer arrangement should consult an employment attorney.

  1. Indiana Medicaid work requirements: Why nonprofits should be paying attention

A separate issue coming this fall involves people who may volunteer with your organization.

Beginning Jan. 1, 2027, Indiana Medicaid will begin enforcing new work requirements for certain adults enrolled in the Healthy Indiana Plan (HIP). Most HIP members ages 19–64 who are not pregnant and are not enrolled in or eligible for Medicare will need to meet the requirements unless they qualify for an exemption (Indiana Family and Social Services Administration [FSSA], 2026).

The requirement is generally 80 hours per month of qualifying activity. Importantly for nonprofits, qualifying activities include:

  • Employment
  • Community volunteering
  • Education
  • Apprenticeships
  • Job training or qualifying work programs

Individuals can combine qualifying activities to reach the required 80 hours (FSSA, 2026).

Why does Oct. 1 matter?

The Medicaid work requirements do not actually begin Oct. 1.

They begin Jan. 1, 2027.

But Oct. 1 is an important date for people whose HIP applications or redeterminations begin in January. FSSA says January applicants must demonstrate qualifying activity during October, November and December (FSSA, 2026).

That means people who need to meet the requirement may need to begin documenting qualifying hours now.

The Indiana Capital Chronicle reported in August that state officials estimated as many as 300,000 Hoosiers could ultimately be subject to the new requirements, although the number affected will depend on exemptions and other eligibility factors (Smith, 2026).

Who should nonprofits be aware of?

This may be particularly relevant to organizations that:

  • Have regular volunteer programs.
  • Work with people who may be enrolled in HIP.
  • Serve low-income or economically vulnerable Hoosiers.
  • Recruit volunteers for ongoing service opportunities.
  • Provide education, job training or community-service opportunities.
  • Work with people who may be looking for qualifying volunteer hours.

There are numerous exemptions. FSSA lists exemptions and other circumstances involving, among others, certain caregivers, people who are pregnant or recently pregnant, people who are medically frail or have certain serious medical conditions, some former foster youth, veterans with a 100% disability rating, and people participating in certain treatment programs (FSSA, 2026).

What does this mean for a nonprofit that has volunteers?

This is where nonprofits may want to think ahead.

Track volunteer hours

If your organization already has a volunteer program, make sure you have a consistent way to record when volunteers serve and how many hours they complete.

Be prepared to document service

FSSA has created a HIP Work Requirements Partner Toolkit with resources for organizations helping communicate about the new requirements. The state also directs members to its Benefits Portal for reporting hours and managing HIP coverage (FSSA, n.d.).

Nonprofits may want to establish a straightforward process for responding when volunteers ask for documentation of their service.

Keep volunteer service genuinely voluntary

The Medicaid rules do not change federal labor law.

Someone volunteering to satisfy a Medicaid requirement does not automatically become an employee. Conversely, an employee cannot simply become an unpaid volunteer for the same work they are paid to perform (U.S. Department of Labor, 2026a).

Train staff who coordinate volunteers

Volunteer coordinators and other front-line staff may be among the first people to hear questions about Medicaid requirements. Make sure they know where to direct people for eligibility questions rather than attempting to interpret the rules themselves.

Avoid promises

A nonprofit can document the volunteer service it provides, but it should not promise that a particular volunteer activity will guarantee someone’s Medicaid eligibility. FSSA makes the eligibility determination.

A quick timeline

Sept 7, 2026:

DOL issues FLSA Opinion Letter 2026-12 regarding FLSA-exempt nonprofit employees volunteering for their employers.

Why it’s important: Review of practices involving employees who also volunteer may be needed.

Oct 1, 2026:

The three-month lookback period begins for people whose HIP requirements begin with a January 2027 application or redetermination.

Why it’s important: Some HIP applicants may begin accumulating qualifying volunteer hours.

Oct- Dec, 2026:

Qualifying activity is tracked for January applicants.

Why it’s important: Organizations with volunteer programs may receive questions about documenting service.

Jan 21, 2027:

Indiana begins enforcing HIP work requirements for new applicants and redeterminations initiated on or after this date.

Why it’s important: Some HIP members will need 80 hours/month of qualifying activity or an applicable exemption.

Ongoing:

HIP members subject to the requirements will need to document qualifying activity according to their applicable reporting and redetermination schedule.

Why it’s important: Volunteer documentation may become an ongoing planning factor for organizations serving affected individuals.

(FSSA, 2026; U.S. Department of Labor, 2026a)

One issue, two very different questions

The DOL question is:
Can our paid employees also volunteer for our organization?

The Medicaid question is:
Can someone who volunteers with our organization count those hours toward Indiana’s HIP requirements?

The answer to the first depends on the employee’s status, whether the volunteer work is genuinely voluntary and whether the work is the same or similar to the work the employee is paid to perform (U.S. Department of Labor, 2026a).

The answer to the second depends on the individual’s Medicaid eligibility and whether the activity meets FSSA’s requirements (FSSA, 2026).

One does not override the other.

Bottom line for nonprofits

If you employ people who also volunteer: Review your practices now and make sure unpaid volunteer activities are genuinely voluntary and meaningfully different from the work employees are paid to perform.

If you operate a volunteer program: Be prepared for some volunteers to ask whether and how their hours can be documented for Medicaid purposes.

If you serve people who may be affected by HIP changes: Familiarize staff with the state’s resources so they can point people to accurate information.

And if your organization is going to document volunteer hours, now is a good time to make sure your system is simple, consistent and easy for volunteers to understand.

This article is intended as a general resource for Indiana nonprofits and is not legal, employment or benefits advice. Because labor law and Medicaid eligibility rules can be fact-specific and may change, organizations should consult the appropriate government agency or qualified professional about individual situations.

Resources for nonprofit leaders

Employee/volunteer questions

U.S. Department of Labor. (2026a). FLSA2026-12: Whether FLSA-exempt employees of a nonprofit organization may volunteer outside of their normal work hours for their employing organization.
https://www.dol.gov/sites/dolgov/files/WHD/opinion-letters/FLSA/FLSA2026-12.pdf

U.S. Department of Labor. (2015). Fact sheet #14A: Non-profit organizations and the Fair Labor Standards Act (FLSA).
https://www.dol.gov/agencies/whd/fact-sheets/14a-flsa-non-profits

U.S. Department of Labor. (n.d.). Volunteers. FLSA Advisor.
https://webapps.dol.gov/elaws/whd/flsa/scope/ee16.asp

Indiana Medicaid/HIP questions

HIP Work Requirements Partner Toolkit. (n.d.). HIP work requirements partner toolkit.
https://www.in.gov/fssa/hip/hip-work-requirements/hwr-partner-toolkit

Indiana Family and Social Services Administration. (2026). HIP work requirements.
https://www.in.gov/fssa/hip/hip-work-requirements/index

Smith, C. (2026, August 12). Up to 300,000 Hoosiers could face Medicaid work mandate. Indiana Capital Chronicle.
https://indianacapitalchronicle.com/2026/08/12/up-to-300000-hoosiers-could-face-medicaid-work-mandate/

Oct 05

Why Indiana Nonprofits Are Taking a Collaborative Approach to Benefits

By Sponsor Insight

Healthcare costs have become one of the most significant financial pressures facing nonprofit organizations and show little sign of easing. Medical trend is projected at 7% to 8%, while pharmacy trend is expected to reach 13% to 15%. Pharmacy spending now represents approximately 30% of total healthcare costs, driven by specialty medications, expanding use of GLP-1 therapies, growing behavioral health demand and continued provider consolidation. [Aon Global Medical Trend Rates Report 2026]

For nonprofit leaders, these numbers carry implications far beyond annual renewal discussions. When benefits spending grows faster than revenue, the effects can be felt throughout the organization, influencing recruitment and retention, staffing plans, compensation strategies, reserves and program investment.

Why Traditional Cost Management Is Producing Smaller Returns

For years, many organizations managed rising healthcare costs through plan design changes. Deductibles increased. Employee contributions rose. Cost-sharing became more common.

Those approaches can provide short-term budget relief, but they have limited influence over the forces driving healthcare inflation today. Specialty pharmacy spending continues to outpace medical trend. New therapies enter the market at higher costs. Healthcare provider consolidation continues to affect pricing.

Many nonprofit leaders are now examining whether the way benefits are funded and purchased deserves the same level of strategic scrutiny applied to major investments, facilities planning and long-term financial management. That shift in thinking is driving interest in alternative funding structures that may offer greater predictability and purchasing power.

Exploring Available Options

Before evaluating any single structure, it helps to understand how many options exist, because headcount determines which market an organization buys into.

For nonprofits under 50 employees, which includes many Indiana organizations, the default is often a fully insured community-rated plan where premiums are driven largely by factors outside the organization’s control. Alternatives can include grandfathered plans, alternate funding arrangements, association plans and MEWAs, PEO arrangements, and exchange-based coverage through an Individual Coverage Health Reimbursement Arrangement (ICHRA). Each offers different levels of flexibility, administrative support and financial accountability.

Above 50 employees, the range expands to include level-funded and self-funded strategies such as captives, direct self-funding and reference-based pricing. The tradeoff typically becomes predictability versus control, with the right approach depending on claims experience, reserves and risk tolerance.

Yet many nonprofit leaders never see the full range of options presented side by side. As a result, organizations often renew within a narrow set of choices while cost pressures continue to build. One of those broader options is now available in Indiana for the first time.

A Different Model for Indiana Nonprofits

One structural option Indiana nonprofits now have is the Indiana Nonprofit Benefits Trust, the state’s first Multiple Employer Welfare Arrangement (MEWA) built exclusively for nonprofit organizations.

The Employee Retirement Income Security Act (ERISA) defines a MEWA as an arrangement that allows employers outside the same control group to participate in a pooled health plan, provided they share a work-related common bond. For this Trust, that bond is nonprofit status and membership in the Indiana Philanthropy Alliance. Participating organizations join a single pooled arrangement rather than purchasing coverage as individual small groups.

Pooling changes the rating conversation. Small employers in the traditional market are frequently community rated, with premiums driven by age bands and factors outside their control. Inside the Trust, organizations are rated as part of a larger group with stable pricing that is not age-banded. Claims volatility is spread across the pool, so a single high-cost year at one organization does not land entirely on that organization’s renewal.

The Indiana Department of Insurance approved the Trust in late 2025 following an 18-month collaboration among Welborn, NFP, Indiana Philanthropy Alliance and a founding group of nonprofit organizations. Those organizations helped shape and test the structure before launching, ensuring it reflected the realities of nonprofit budgets and operations.

Underneath the mechanics sits a straightforward observation. Indiana nonprofits face remarkably similar workforce and healthcare pressures, including the challenge of offering competitive benefits to attract and retain talented employees, and most have been absorbing those pressures independently.

Why the Partnership Matters

The collaboration that produced the Trust should look familiar to anyone working in this sector. Shared services, collective funding and coalition advocacy exist because certain problems respond better to collective effort. Employee benefits may be becoming another area where collaboration can create value.

What that collaboration produced is a network, not just a rate. IPA membership is a condition of joining, and the requirement was intentional. As Indiana’s statewide network for philanthropy, IPA advocates at the state and federal levels on issues affecting the sector and brings organizations together around shared challenges and opportunities. Nonprofit members participating in the Trust can also take part in select IPA convenings and resources relevant to their work, creating opportunities to connect with others across Indiana’s philanthropic and nonprofit communities.

Those opportunities acknowledge something experienced nonprofit leaders already understand: workforce challenges are rarely solved through benefits alone. Sustainable solutions often require organizations to examine leadership, culture, financial strategy and employee experience together.

The plan itself is built the same way, with support for the people who administer it and the people who use it, including online enrollment, dedicated member support, pharmacy savings programs, virtual care and wellbeing resources. For organizations that have spent several renewals managing costs through reductions or increased employee cost-sharing, access to additional services and support can help shift the benefits conversation.

What Leaders Should Be Thinking About Next

A collective purchasing model will not be the right answer for every nonprofit. Workforce demographics, organizational size, claims experience, financial objectives and risk tolerance all point in different directions, and the appropriate structure depends on facts specific to each organization.

Nonprofit organizations have more options than many realize, and the Indiana Nonprofit Benefits Trust represents one Indiana-based response to rising healthcare costs. More broadly, it reflects what the nonprofit sector has long done well: working together to address shared challenges in ways that can strengthen individual organizations and the sector as a whole.

At NFP, we believe leaders make stronger decisions when they understand the full range of available strategies. Whether that means a MEWA, a fully insured plan or another approach, the objective remains the same: helping Indiana employers support and retain the people who carry out their missions while protecting the financial resources that make that work possible.

If this article sparked questions about your organization’s benefits strategy, we’d welcome a conversation. Reach out to Anna Beaty (anna.beaty@nfp.com) or email INnonprofittrust@nfp.com for more information.