Gaining an understanding of the ACA is vital for nonprofits

August 28, 2013

Gaining an understanding of the ACA is vital for nonprofits

The Affordable Care Act was signed more than three years ago by President Barack Obama, but constant tweaks and changes being made to the legislation have made it difficult for nonprofits to truly understand how the law will affect their bottom line when employers will be required to provide health care benefits to full-time employees. One source of confusion that nonprofits will encounter is whether organizations will have to pay for the health care benefits of part-time staff, according to an article for The NonProfit Times.

Nonprofits are having trouble with ACA
Many nonprofits are concerned that they can lose some of their skilled staff members who are paid on a hourly wage, or if the legislation will impact their bottom line and force them to pay part of the health care benefits of their workforce who work at least 30 hours per week. Organizations are putting a cap on their number of employees and are changing strategies at a result of the difficult-to-understand law to ensure they are in compliance with the ACA.

"There are obviously a lot of nuances to the law," Chris Vest, director of public policy for ASAE: The Center for Association Leadership, told the news source. "There continues to be a lot of confusion in the nonprofit marketplace."

Andy Germak, executive director of the Institute for Families and a lecturer on Nonprofit and Public Management at Rutgers University, told the news source that the ACA has has several good components, but nonprofits could be greatly affected if they aren't careful. Germak interpreted that the law will ask employers to pay 60 percent of premiums for dependent care, a number that could potentially hit nonprofits hard.

Nonprofits could receive a tax break
While there are many complications within the ACA that have made it difficult to to understand, nonprofits may be able to benefit from a tax break that will allow them to save a substantial amount of money. According to an article in the Athens Banner Herald, a daily newspaper in Georgia, organizations will be eligible for the Small Business Health Care Tax Credit if they pay at least half the costs of employees' single coverage health care plans, have less than 10 full-time employees and pay under $25,000 in average wages per employee.

If they qualify, nonprofits are able to receive a refund of 25 percent of the expenses paid by the employer for employees' health insurance premiums, the newspaper stated. When 2014 hits, this tax break will grow to 35 percent, which can play a huge factor in the organizations' ability to keep their heads above water.

"Regardless of whether or not the state expands Medicaid, or whether or not it operates a state-based marketplace, or rather relies on a federally-facilitated marketplace, the tax credits are still available to eligible entities," Amanda Ptashkin, outreach and advocacy director at Georgians for a Healthy Future in Atlanta, told the Athens Banner Herald.


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We first started using First Nonprofit’s Unemployment Savings Program when we were a small startup nonprofit.  We didn’t have an HR department and needed expertise in the event that an unemployment claim was made.  We knew we were eligible to be a reimbursing employer, but weren’t sure how to navigate that process.  They made it easy to set things up, plan for, and then manage claims when they came at a very reasonable cost. The amount of time and stress they’ve saved us dealing with all this has been worth way more than the cost.  We’ve now grown to a large nonprofit and do have an HR department but have no plans to stop using their services.  I highly recommend them to every nonprofit I come into contact with!


Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL

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Visually Impaired Preschool Services, Louisville, KY