Resources House Letter Senate Letter Locate contact information for your Senators and Representative Take Action More on Understanding Health Care Reform

Incentives for Nonprofit Employers

Letter to Representatives

Dear Representative __________:

On behalf of [organization], I am writing to urge you to ensure that health care reform legislation includes incentives similar to those offered to small businesses to help nonprofit employers provide health coverage to their workers.

Nonprofit organizations employ over 14 million people in the United States -- almost 10 percent of the U.S. workforce -- who are integral to the vital services these organizations provide to communities across the nation. The vast majority of nonprofits are small organizations, and like our for-profit counterparts, we generally lack access to the range of health insurance choices available to larger businesses. During these difficult economic times, we are facing rising demands for our services with fewer private contributions and government resources to help meet that demand. Without assistance, most small nonprofits will be forced to cut staff, cut benefits, and cut programs. [Share specifics about the number of people your organization employs, the types of services you provide, and the importance of health care reform to your organization.]

The Affordable Health Care for America Act, H.R.3962, in the House of Representatives includes a small business tax credit provision that would assist businesses with 25 or fewer employees extend health insurance to their workforce. As currently written, most tax-exempt organizations would not be able to use the tax credit that applies only to income taxes owed by the business.

Committees in the U.S. Senate have considered the need for parity between for-profit and nonprofit employers and developed two alternative proposals, one providing direct subsidies and the other modifying the tax credit approach. The bill approved by the Senate Health, Education, Labor and Pensions (HELP) Committee would provide a program credit, or subsidy, for small employers, both nonprofit and for-profit employers, to help pay the cost of health insurance premiums. The Senate Finance Committee bill would provide a tax credit to eligible businesses and 501(c)(3) organizations, and would permit nonprofits to apply a narrower credit to taxes they withhold from payroll.

We recognize that as the bills from different committees are combined for House and Senate consideration Congress must control costs while balancing many interests. We ask that you ensure that any bill ultimately approved by the House includes 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.

Sincerely,

****************************

Letter to Senators

Dear Senator __________:

On behalf of [organization], I am writing to urge you to ensure that health care reform legislation includes incentives similar to those offered to small businesses to help nonprofit employers provide health coverage to their workers.

Nonprofit organizations employ over 14 million people in the United States -- almost 10 percent of the U.S. workforce -- who are integral to the vital services these organizations provide to communities across the nation. The vast majority of nonprofits are small organizations, and like our for-profit counterparts, we generally lack access to the range of health insurance choices available to larger businesses. During these difficult economic times, we are facing rising demands for our services with fewer private contributions and government resources to help meet that demand. Without assistance, most small nonprofits will be forced to cut staff, cut benefits, and cut programs. [Share specifics about the number of people your organization employs, the types of services you provide, and the importance of health care reform to your organization.]

There are two proposals in the Senate that would provide incentives to qualifying nonprofit and for-profit employers that offer health insurance to their employees. The bill approved by the Senate Health, Education, Labor and Pensions (HELP) Committee would provide a program credit, or direct subsidy, for small employers, both nonprofit and for-profit employers, to help pay the cost of health insurance premiums. Eligible employers are those that have 50 or fewer employees, and where the average salary is less than $50,000. The subsidy would be available for up to 3 consecutive years and would be applied directly to a Health Insurance Exchange to reduce the premiums that the employer would pay.

The Senate Finance Committee bill would provide a tax credit for up to two years for a narrower pool of eligible businesses and 501(c)(3) organizations: those with less than 25 employees and average wages below $40,000. Nonprofits would be permitted to apply a modified credit to the taxes they withhold from payroll. Employees would still receive full credit for taxes withheld from their pay. The bill would provide larger credits to for-profit businesses, which would apply them to income taxes that they owe.

As the Senate works to merge the separate committee bills, we recognize the need to control the costs while balancing many interests. We ask that you ensure that health care incentives treat nonprofit and for-profit employers equally and provide direct assistance to nonprofit employers so that they may provide health insurance for their employees.

Sincerely,

Last updated: October 29, 2009