Exempt Organizations Advisory - House Passes Health Care Bill

Catherine W. Wilkinson (cwilkinson@steptoe.com)
Suzanne Ross McDowell (smcdowell@steptoe.com)

On Saturday November 7, 2009 the House passed the Affordable Health Care for America Act (H.R. 3962). As with the earlier version of the House bill, it excludes most small nonprofit organizations from the credit for small business employee health coverage expenses. See H.R. 3962 § 521. The bill provides a business tax credit to certain small businesses that provide insurance to their employees; however, because most exempt organizations do not pay any tax, the credit is not available to many organizations that would otherwise qualify as eligible small employers. Senate versions of the bill provide tax-exempt organizations a credit that could be used to offset payroll taxes, or a direct subsidy that would be available to all qualified small employers including exempt organizations. 

The House bill also authorizes the Federal Trade Commission to investigate all insurance companies, including those registered as not-for-profit companies.

Additional information on the House bill can be accessed here.