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How Health Care Impacts Charities

How Health Care Impacts Charities

President Obama reaches for a pen to sign the health care bill Tuesday. A poll finds increased support for the measure. (AP Photo by Charles Dharapak)

Christie Garton / USA Today

March 24, 2010

As we begin to make sense of Congress’ sweeping overhaul of health care on Sunday, one thing is certain — all Americans and businesses will be impacted by the legislation in one way or other. Even charities both large and small must prepare for the change that will come.

Indeed, The Chronicle of Philanthropy explained on Monday what effect the legislation would have on small charities:

The historic health-care bill adopted by the House of Representatives last night provides relief to small charities that offer health insurance to their employees — a victory for non-profit leaders who fought for such language.

By adopting the Senate version of the major health-care overhaul, the House agreed that both non-profit groups and businesses could qualify for tax credits. The original House bill offered only income-tax credits to small employers , which would not have helped tax-exempt groups.

Poll: The new health care bill

Poll: The new health care bill

How does it work?

Non-profit groups with no more than 25 full-time employees and average wages below $50,000 can apply the tax credit to certain payroll taxes.

The Chronicle goes into further detail:

For tax years 2010 through 2013, non-profit groups will be eligible for up to 25 percent of the costs if they pay for at least 50 percent of the premiums (businesses get 35 percent). Starting in tax year 2014, they will be eligible for up to 35 percent of such costs if they buy insurance from new exchanges, or insurance marketplaces, that states must set up for small businesses.

Large non-profits, like businesses, that employ more than 50 workers and do not offer health insurance will face federal penalties of $2,000 per non-insured employee under the House of Representative’s “reconciliation bill,” which is up from $750 in the Senate’s version of the bill.

For the full story, go here.

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