Patronage (Cooperative Shareholder Benefit)
As a not-for-profit cooperative, The Alliance® gives a share of its net proceeds back to employers in the form of patronage checks – what we call our Cooperative Shareholder Benefit.
The more money our clients save on health care costs, the greater our net profit — and patronage checks. The percentage of this cooperative shareholder benefit a client earns is based on how much they use The Alliance network to purchase health care.
How our Cooperative Shareholder Benefit works
When The Alliance’s fiscal year ends on May 31, we tally our books and determine our operating surplus – or the amount of net profit that remains after expenses and obligations are paid – and that total is used to distribute our Cooperative Shareholder Benefit.
The Alliance Board of Directors splits the Cooperative Shareholder Benefit into two categories: allocated equity and patronage checks.
- Allocated equity can be used as cash reserves and operating capital, but is held in the names of specific employers. The Board may periodically decide to pay out this allocated equity to members.
- The second category is a patronage check payment made directly to each employer.
An employer’s earned percentage of Cooperative Shareholder Benefit is based upon how much they used The Alliance network to purchase health care in that year. In other words, an employer’s contribution to the total revenue received by The Alliance determines their share of patronage payout.