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Tuesday, October 23, 2012

Non-Profits Are Apprehensive About New Health Care Reform

As the deadline approaches for businesses employing 50 or more people to offer health care insurance for their employees, non-profit organizations are particularly uneasy. The Affordable Care Act requirement applies to both for-profit and non-profit organizations. If they don't comply, they face stiff penalties.

Unlike for-profit businesses, one of the differences with non-profit organizations is that the cost of providing health insurance cannot be passed on to their customers.  They can't just add the cost to the price of their products. In addition, the recession has been particularly difficult for non-profits. Many have been experiencing less donations from organization and private donors since the recession.

This has caused many non-profit organizations to either close their doors or join forces with larger organizations. The Maryland Association of Nonprofit Organizations, for example, reports that the number of organizations with 501(c)(3) non-profit status has decreased in the past few years. In addition to the stresses of the economy, the IRS has also required stricter reporting by those filing as non-profits.

Non-profit organizations typically have small staffs. But they recognize the need to attract qualified people to manage their business, and health care benefits are at the top of the list for people comparing employment alternatives. For non-profits, it may come down to making difficult choices such as cutting expenses somewhere else to allow room for health care insurance costs, or not providing health care insurance and just paying the penalty. Either way, non-profit organizations will be facing some tough decisions in the next few months when it comes to providing affordable health care insurance.

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