UPDATE: Nonprofit Employers and Health Care Reform

UPDATE (March 24, 2010) On Sunday March 21st, the US House of Representatives passed health care reform legislation, adopting the Senate overhaul measure (HR 3590) by a 219-212 final vote. On Tuesday March 23, President Obama signed the bill into law.

As part of the reconciliation strategy, the House has also passed legislation (HR 4872) containing adjustments and modifications to the Senate bill.  The Senate is working to get this passed before recess begins at the end of this week.

The final health care reform legislation includes an expansion of the small business tax credit provision to assist small employers with 25 or fewer employees in extending health insurance to their workforce. As written, all qualifying 501(c) tax-exempt organizations would be eligible to use this credit.

 (October 30, 2009) -- As the federal government continues its debate on health care reform, nonprofit employers run the risk of being excluded from reform package provisions that could ease the burden of high health care costs on employers and their workers.

Earlier in October, the Senate Finance Committee approved health care bills that do provide help to nonprofit employers. The Senate provision extends eligibility for small business tax credits to tax-exempt employers by permitting nonprofits to apply modified credits to certain payroll taxes.

In the House, the legislation tells a different story.  The comprehensive health reform bill that passed this past Saturday evening does not extend eligibility to nonprofit organizations.  There is movement among members to change this, however - on October 22, more than 40 members, including local US Rep. Joe Sestak, signed a letter urging House leaders to include nonprofit employers in relief provisions for small businesses.   When the Senate passes their health care reform bill, it is possible that help for nonprofit could appear in "conference" - where the House and Senate versions of health care reform are compromised before the President signs the legislation into law.

As noted in the 2008 Portfolio, arts organizations - especially small ones - are already particularly hard pressed to provide adequate health insurance to their employees.  Small arts organizations (<$250K in revenues), which make up the largest category of the sector, only contribute 14% on average towards the cost of health insurance.  Medium sized organizations ($250K-$1 million) pay an average of 73%, which is still below the national average for all employers of 84%.  The costs of premiums continue to rise, with many organizations reporting increases of 15-40% for 2010.

Cultural organizations concerned about the plight of nonprofit employers and workers in health care reform are urged to contact their US Senators and Representative. 

Click here for the latest news from the Independent Sector on nonprofits in the health care legislation.

Click here for more information from the National Council on Nonprofits regarding nonprofit organizations and health care reform.