Virginia HB 353 Just Passed — Here's What It Means for Your Nonprofit's HR and Payroll

A major win for Virginia nonprofits just cleared the Senate. Here's what you need to know — and what to do next.

If you lead or manage operations at a Virginia nonprofit, here's news worth paying attention to: House Bill 353 has passed unanimously through the Virginia Senate.

Championed by the Center for Nonprofit Excellence (CNE) and carried by Delegate Katrina Callsen, HB 353 corrects a long-standing gap in state policy that previously prevented nonprofits from accessing the Health Care Consortium — a group health insurance program that was only available to certain organizations.

In plain terms: Virginia nonprofits now have a new, viable path to affordable group health benefits they didn't have before.

But with new options come new administrative questions.

What Is the Health Care Consortium, and Why Does It Matter?

The Health Care Consortium allows organizations to pool together to access group health insurance rates that would otherwise be out of reach for smaller employers. For a nonprofit with 10, 20, or 30 employees, the difference between individual market rates and group rates can be significant — both in monthly premiums and in your ability to attract and retain talent.

The HR and Payroll Implications You Need to Plan For

Adding or changing a group health benefit isn't just a policy decision — it creates a ripple effect through your HR and payroll operations. Here are the practical questions your team will need to answer:

1. How will new benefits be administered? If you're currently managing employee benefits manually — in spreadsheets, email threads, or outdated systems — adding a new group health plan will expose those gaps. Enrollment, deduction tracking, and open enrollment communications all need a system behind them.

2. Is your payroll set up to handle pre-tax deductions correctly? Health insurance premiums are typically deducted pre-tax under a Section 125 cafeteria plan. If your payroll setup isn't configured for this, you could be over-withholding taxes and shortchanging your employees.

3. Does your HR platform support benefits administration? Modern HRIS tools make it significantly easier to manage benefits enrollment, track eligibility, and keep employee records current. If you're not on a platform like this, now is an excellent time to evaluate your options.

4. Are your employee classifications correct? Expanding benefits often prompts a closer look at who qualifies. Full-time, part-time, and contractor classifications need to be accurate before you expand coverage — misclassification issues are common at smaller nonprofits and can create legal exposure.

5. Do you have an onboarding process that reflects your new benefits? New hires need clear, consistent information about their benefits from day one. If your onboarding is informal or undocumented, a new health plan is the perfect trigger to build something more structured.

What Should You Do Right Now?

If you're a Virginia nonprofit leader, here are three immediate steps:

Step 1: Check your eligibility. Visit thecne.org/bills-were-watching to track HB 353 and confirm when it takes effect. The CNE will be publishing updates on their blog and through their newsletter as implementation details become clear.

Step 2: Audit your current HR and payroll setup. Before you add a new benefit, make sure your foundation is solid. Can your current system handle benefits deductions, enrollment tracking, and compliance reporting? If you're not sure, that's your answer.

Step 3: Talk to your benefits advisor. The cost of setting things up incorrectly — in tax penalties, compliance issues, or employee frustration — almost always exceeds the cost of doing it right the first time.

A Note on Timing

Policy wins like HB 353 create a window. Organizations that move quickly to assess their benefits options and get their HR infrastructure in order will be better positioned to compete for talent and operate efficiently. Those that wait tend to scramble when open enrollment season hits.

If your nonprofit is in Virginia and you want to understand what this change means for your specific situation — including whether your current payroll and HR setup is ready — we're happy to have that conversation.

We work with progressive small businesses and nonprofits to build the HR and payroll infrastructure that lets your team do their best work. If HB 353 raises questions about your current setup, reach out, we'd love to help.

Sources: Center for Nonprofit Excellence Virginia — thecne.org