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Health Care Reform and the Nonprofit Community

Rising health care costs have become an increasing concern for nonprofit organizations both as employers and service providers.

Nonprofits as Employers

• In 2005 (the latest year for which data are available), nonprofits paid over $48 billion for employee health care coverage and related benefits (not including pension plan contributions or payroll taxes) – over 4.6% of their total expenditures.
• Since 1999, health insurance costs for small firms have increased 113 percent, according to the National Federation of Independent Business.
• Since then, the cost of health care coverage has skyrocketed and nonprofits now face difficult decisions about whether to cut benefits for employees or cut staff positions.

 Nonprofits as Service Providers

• As service providers, charitable groups see every day what happens to Americans who cannot afford quality care.
• Nonprofits, particularly those that deliver health and human services, incur substantial costs associated with serving the over 46 million Americans who do not have health care coverage, as well as the millions of other individuals and families whose health coverage is insufficient to cover the costs of care and prevention.
• Benefit and workforce reductions due to rising health care costs greatly diminishes the ability of nonprofit organizations to deliver programs and vital services to communities and individuals in need.

Independent Sector supports health care reform that focuses on accessible and affordable medical care for all. We believe that health care reforms should provide:

• Assistance to help low-income individuals and families secure health insurance
• Access to health insurance exchanges for both individuals and organizations to help obtain the best quality and most affordable coverage available
• Individual responsibility, including provisions for “portability” so that insurance coverage is tied to the individual and not the employer or locale
• System responsibility, enhanced by provisions prohibiting exclusions for prior health conditions or current illness
• Equal access, for the nearly 14 million nonprofit employees, to the same range of health care options available to employees of any other public or private entity, regardless of size or geographic location
• Equivalent incentives for both for-profit and nonprofit employers to provide health care and wellness programs for their employees
• Costs that are distributed fairly without placing increased burdens on low and middle-income Americans
• Preservation of tax incentives that encourage Americans to make charitable contributions to benefit their communities

TAKE ACTION
Learn more about what you can do to help ensure that health care reforms address the needs of the nonprofit community and the people it serves, and provide for all Americans to have access to affordable, high-quality health care.

Last updated: November 13, 2009