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How does the Affordable Care Act impact nonprofit employers?

Nonprofits, like all other employers in the United States, are affected by the Affordable Care Act (“ACA”). The size of a nonprofit’s workforce will determine which provisions of the ACA it must follow. In general it’s important to know whether or not your nonprofit has 50 or more “full-time equivalent employees,” as defined in the ACA (read the IRS FAQs on this topic).

The ACA requires almost all employers to provide notice to their employees explaining available options for health insurance. Read all about the new employee notice requirement and how to document your nonprofit's compliance with the federal rules. (Employee Benefits International)

Affordable Care Act FAQs for charitable nonprofits (National Council of Nonprofits)

Did you know that small employers may be entitled to reimbursement for health care insurance premiums paid to cover their employees? The Small Employer Health Care Tax Credit applies to tax-exempt nonprofit employers.

Key provisions for employers with 50 or more employees

(Source: IRS and Small Business Administration)

FAQs for large employers (50+ employees) (IRS)

Key provisions for employers with fewer than 50 employees

(Source: HHS, IRS, and Small Business Administration)

FAQs for small employers about the "employer mandate" (IRS)

Summary: The ACA provides small employers (those with fewer than 50 full-time equivalent employees) with access to a Small Business Health Options Program (SHOP) referred to as the "Marketplace" in every state, offering coverage through qualified health plans. Information about the enrollment process, including deadlines for enrollment.

 

Key provisions for employers with fewer than 25 employees

(Source: Small Business Administration and IRS)

The notice requirement described above applies to nonprofits with only 1 employee.

NOTE: If your nonprofit employs fewer than 25 employees, pays premiums for health insurance for its employees, and average wages for employees are less than $50K annually, the nonprofit may be eligible for the Small Employer Health Credit to help pay for the cost of health insurance for your staff. Since tax-exempt organizations do not pay income tax to the IRS, the "credit" is in the form of a refund on employee income tax withholdings.

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