The White House is still hoping that the House can pass the Senate bill quickly. Moderates Democrats in the House however, believe that quickly is no longer an option. They interpret the Massachusetts phenomenon as a message to Congress to start focusing on jobs and job creation rather than revamping America’s health care system.

Regardless, if the Senate bill does pass, then small nonprofit employers would finally be able to offer affordable health insurance to their employees. The Senate bill [The Patient Protection and Affordable Care Act (H.R. 3590)] however, has our language (Section 1421) creating a 25% to 35% tax credit that nonprofits could apply to their payroll tax withholding. The House bill [The Affordable Health Care for America Act (H.R. 3962)] does not have this provision. The House bill’s small businesses tax credit would only apply to for-profit companies. Basically, the small employer provision in the Senate’s version of the health care bill helps nonprofits mitigate the excessive costs so that their employees and their families have access to quality, affordable coverage

Speaker Pelosi may have to accept the Senate version of the bill. If the House accepts the Senate bill “as is” they would need to quickly get it back to the House for a vote before the new Senator Brown is sworn-in. If the House chooses to amend the Senate bill, then the amended bill would have to go back to the Congressional Budget Office for a new score, and receive the 75 hour comment period before it could be put to a vote in the House. There may even need to be a second conference committee. Either way, this is unlikely to happen before Senator Brown can be seated. If House Speaker Pelosi does accept the Senate bill, even though she has stated publicly that said she wouldn’t, then a second bill, a reconciliation bill, would be needed later to incorporate the additional items from the House bill. The real question is whether she would have the votes at that point to get it passed. The third alternative is for House leaders to merely table the bill and move on, leaving health care reform exactly where they found it. For more on the current status of health care reform go to http://www.philly.com/philly/business/82230437.html.

11/17/09 Contact Your US Senator on Health Care Reform for Nonprofits. On November 7, the US House of Representatives passed H.R. 3962, the Affordable Health Care for America Act of 2009, by a vote of 220-215. Pennsylvania’s Congressional Delegation voted alone party lines except for Reps. Holden and Altmire, both Democrats who voted against what is perceived as a House Democrat bill. Now that the House has passed its version of the bill, we are waiting on for the Senate to take action. Harry Reid (D-NV) Senate Majority Leader, has merged the two Senate versions of the bill (the Senate Finance and Health Education Committee version and the Labor and Pensions Committee version) into a single proposal for the Senate to consider.

Independent sector is urging nonprofits to continue contacting your Senators. Urge them include health care incentives that treat nonprofit and for-profit employers equally and provide direct assistance to nonprofit employers so that they may provide health insurance for their employees Tax credits provided in the House bill for small employers won't help most nonprofit employers because they don’t pay income tax. Read more at http://independentsector.org/programs/gr/HealthCareReform_Action.htm. 

For background, check out the Nonprofit Times news article Healthcare Reform At What Cost? at http://www.nptimes.com/09Oct/npt-091001-1.html. 

10/27/09 44 Members of Congress Stand Up for Nonprofits

For Immediate Release Contact: David A. Ross, J.D, PANO Public Policy Officer 717-236-8584 x1009; david@pano.org 

(Harrisburg, PA; October 26, 2009) 44 members of Congress stood up for the millions of workers employed by America's nonprofits. Those 44 Representatives sent a letter last Friday urged House leaders to include nonprofit employers in the final House health care reform bill. Unless Congress acts, 640,000 workers employed by Pennsylvania nonprofits would be left without the protections that national health care reform will provide to employees of for-profit businesses.

The letter, signed by 44 members of Congress from 22 states, to House Speaker Nancy Pelosi and Majority Leader Steny Hoyer, underscored the fact that the vast majority of nonprofits are small employers experiencing the same unsustainable increases in insurance premiums that small for-profit businesses experience. The letter pointed out that "none of the current House bills extend reforms and benefits to the nonprofit sector. As written, the tax credit provisions included by the House to address the needs of small, for-profit business would not be available to small nonprofit employers."

Congresswoman McCollum (D-MN), a respected champion of nonprofits, explained her reason for initiating the letter and leading this effort to bring the nonprofit sector’s health care reform concerns to the attention of Speaker Pelosi and Majority Leader Hoyer: "The millions of Americans who work in the nonprofit sector must be included in health care reform. The nonprofit sector includes a wide range of small and midsize organizations, from food banks and homeless shelters to health clinics and domestic violence shelters that are all working to improve life for families in our local communities. It's only fair that nonprofit organizations receive comparable treatment to the small business sector in health care reform legislation."

“For the most part, nonprofits can’t use tax credits because they don’t generate taxable income. In other respects, they are small local businesses,” said David Ross, Public Policy Officer for Pennsylvania Association of Nonprofit Organizations (PANO). “90% of Pennsylvania’s nonprofits are small with budgets below $1 million. Like their for-profit counterparts, small nonprofits can no longer afford to pay ever-increasing health insurance premiums,” Ross added. “This is especially critical given the current recession. Nonprofits are being forced to provide increased levels of services without an increase in funding. Congress must address the needs of small, nonprofit employers. At the very least, Congress should provide the same level of health care relief to nonprofits as they are providing to small for-profit businesses.”

Tim Delaney, President & CEO of the National Council of Nonprofits, underscored Congresswoman McCollum's concerns: "Every dollar nonprofit employers pay in higher insurance premiums is another dollar taken away from delivering essential food, shelter, clothing, and other vital services that people need in this devastating economy. Individuals employed by nonprofits should not be penalized because they work for public good rather than private gain." Delaney added, "We hope that the White House will now step forward to join this growing chorus in the House and Senate who recognize that nonprofits are vital employers who cannot be left behind on health care reform."

The National Council of Nonprofits and Pennsylvania Association of Nonprofit Organizations will continue to work with the broad coalition of nonprofits that has been working with the House and Senate to incorporate provisions in the health care reform bills that would treat small nonprofit employers and for-profit business employers with parity. We invite our members of Pennsylvania’s Congressional delegation to step forward with us and join Congressman Sestak and the growing chorus in the House and Senate that recognize that nonprofits are vital employers that cannot be left behind on health care reform.

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September 13 New York Times story, “Nonprofit Groups Upset at Exclusion from Health Bills” · “Nonprofit organizations say they are upset that Congress and the Obama administration have not addressed their rising health care costs in the various health care proposals being floated on Capitol Hill.”

Column in The Nonprofit Quarterly: “Nonprofits: We Must Start Beating the Drum”

· Provides basic statistics about the nonprofit sector

· Demonstrates how nonprofits have been excluded

· Offers leads for stories in various states (see the insightful posted comments)

The Cohen Report: “Whither Health Care Reform”

· Provides sound points and cites important statistics

10/1/09 Update from the National Council of Nonprofit Organizations

9/30/09 Nonprofit H1N1 Flu Prevention Toolkit from the National Council of Nonprofit Organizations.

8/12/09 Voice Support for Nonprofit Federal Health Care Incentives. Congress has been exploring options to give to employers as incentives for providing federal healthcare to their employees. Two proposals are currently under consideration by committees in both Congressional houses. The President has made federal healthcare reform the priority of his Administration for the rest of this year and nonprofits will be directly impacted by healthcare reform Congress will enact in the coming months. PANO and Independent Sector ask you to urge your member of Congress to support nonprofit incentives in the upcoming healthcare reform bills.

The first plan, entitled the Program Credit Approach, was included in the bill approved by the Senate Health, Education, Labor and Pensions (HELP) Committee. This plan would provide a subsidy (called a “program credit”) to both for-profit and nonprofit employers to assist them in providing healthcare for their employees. To qualify for this credit, the employer must pay 60% of the premium costs, have fewer than 50 employees, and have an average employee salary of less than $50,000. This subsidy would be available for up to three consecutive years and would reduce the premiums paid by the employer by applying the funds directly to the Health Insurance Exchange as outlined in the American Affordable Health Choices Act passed by the Senate HELP Committee.

The second plan, entitled the Tax Credit Approach, was included in the House Ways and Means Committee’s healthcare bill. This plan would provide a tax credit equal to 50% of the cost for employee healthcare for an organization with less than 10 employees and an average wage of $20,000. However, as written this plan does not include nonprofits of similar size. The Senate Finance Committee is considering a similar method of funding for their bill, but it is expected to be less generous than the Ways and Means’ version. The Senate Finance Committee has yet to release a draft of their bill, but has indicated it intends to hold a mark-up of its bill in by September 15, 2009.

It is vital that lawmakers understand that nonprofit employers need incentives for providing healthcare coverage that are equivalent to those provided to for-profit organizations. We urge you to contact key members of the Senate Finance Committee and voice your support for nonprofit healthcare coverage incentives.

Check out Independent Sector for talking points on the new proposals. Download a sample letter to help you make the case for nonprofit Incentives.

7/31/09 Governor Rendell has signed a new bill that will affect small and large businesses. Please review this important information to learn how Act 2 of 2009 will impact your business.

7/15/09  House Releases Comprehensive Healthcare Reform Bill. On Tuesday July 14, 2009, a comprehensive healthcare reform bill, cited as the “America’s Affordable Health Choices Act of 2009,” was released by a House Democratic leaders. The Act calls for a government-run insurance plan that would compete with private insurance companies. The plan prohibits insurers from using pre-existing conditions as a means to deny coverage. In addition, the plan would provide tax credits to partially subsidize health insurance for employers with 25 employees or less and create a health insurance exchange. All Americans will be required to obtain health insurance. The legislation has been sent to the House Ways and Means Committee for mark-up, starting Thursday July 16. Though Republicans are attempting to slow down the legislation, House Democrats plan to have the bill passed by the end of July. Read the newly-published “America’s Affordable Health Choices Act of 2009.” 

7/15/09 Congress Seeks Taxes and Deductions to Fund Federal Healthcare Reform. On July 14, 2009, the House Ways and Means Committee released their healthcare reform legislation. The House funding proposal does not contain a plan to curb tax benefits for nonprofit hospitals that do not provide enough free medical care, as previously proposed. Instead, to help pay for the over $1 trillion healthcare overhaul, the three House committees with jurisdiction over the issue (Ways and Means, Education and Labor, and Energy and Commerce) will impose a surcharge on individuals with an adjusted gross income of more than $280,000 and on households earning more than $350,000. The tax rate would start around 1% for families making $350,000, up to 5.4% for families making over $1 million. The tax is expected to raise about $540 billion over 10 years, paying for nearly half of the estimated cost of the legislation. The rest of the cost would be covered through decreased spending on Medicare and other government healthcare services. The Three Committees involved are expected to mark-up their legislation on July 16, 2009.

The Senate Finance Committee will not be recommending a surcharge on wealthy individuals and families for its legislation. Instead, the Committee will look to adapt a version of the President’s proposal to limit itemized deductions for charitable contributions for high income taxpayers. No specific details about the deductions have been released. Another possible form of funding may come from taxing employer-provided health benefits. Max Baucus, head of the Senate Finance Committee will meet with the core group of negotiators on the Committee on Tuesday, July 14, 2009 to further discuss forms of funding the legislation. The Committee is expected to draft their legislation in the coming weeks.

6/17/09 Federal Healthcare Legislation Expected this Week.  The US Senate Finance Committee expects that it will have health care legislation drafted by the end of this week. The challenge is not how to expand health care coverage to millions of Americans, but how to pay for it.  The US Senate Finance Committee is considering options for funding proposed changes to the nation’s healthcare system. Among these options is establishing a threshold of minimum community benefit as a condition for hospitals to receive charity status, not just a percentage contribution. Existing nonprofit hospitals that fail to meet the minimum level of charitable would be forced to pay an “excise tax”. However, there is uncertainty as to what qualifies as a community benefit. Some hospitals consider Medicare and Medicaid costs to be charitable, while others do not. The bill would need to clarify this ambiguity.

The Committee is also considering taxing healthcare benefits worth more than $17,000 as regular income, while allowing the cap to grow annually.  Variations on this plan would raise the cap to $20,000 with less annual adjustment, or use income as a factor for limiting taxes. According to the Wall Street Journal, the Committee’s public healthcare plan will focus on “nonprofit cooperatives that would be governed by their members and would compete inside the new insurance exchange”. To fund this plan, Senator Baucus has proposed raising itemized tax deductions on personal health costs from 7.5% to 10%, or possibly doubling the tax penalty (to 20%) for nonmedical withdrawals from tax preferred health savings accounts.  

6/2/09 US Senate Finance Committee to Mark–Up Health Care Reform Bill.  Last month (5/20/09) the US Senate Finance Committee released a report discussing their options for financing healthcare reform and justifications for targeting nonprofit hospitals.  This month, the Senate Finance Committee plans to address several key nonprofit issues such as nonprofit access to health care coverage, insurance coverage, incentives for coverage and wellness, and how to pay for expanding health care coverage. PANO supports equivalent healthcare coverage, benefits and prices available to federal workers be given to nonprofit employees, as well as the extension of tax credit incentives for the dispensation of healthcare to include tax-exempt employers. The Committee is even considering a way for nonprofits to pay for this by limiting charitable tax exemptions and deductions.  The committee is considering a new community benefit standard for nonprofit hospitals that will restrict their tax deductions. The nonprofit hospitals could be required to conduct an annual community needs analysis based on the level of charity care they provide.  In addition, the Committee is considering a proposal from the President’s budget that would lower the maximum tax deduction for charitable giving from 35% to 28% for individuals whose annual income exceeds $250,000.  Read the 5/14/09 Senate Finance Committee Report on Expanding Health Care Coverage.