Study Shows Escalating Health Care Costs have Become Number One Issue for Nonprofits - Much of the attention in the current health care debate has focused on the impact of escalating health care costs on small businesses and the uninsured. But new data generated by the Johns Hopkins Nonprofit Listening Post Project reveal that health care costs are also producing a so-far hidden crisis for America's nonprofit organizations and the nearly 13 million workers they employ.

Virtually all (98 percent) of the responding nonprofits offering health benefits indicated that they are concerned about their organization's health care costs, and a striking 59 percent ranked health care costs as one of their organization's top challenges. The impact is already being felt in organizational decisions to stop offering, or reduce coverage of, health benefits, in higher employee co-pays and shares of insurance costs, and in pressures to hold down wages, shift to part-time employees, and even reduce mission-critical services.

The nonprofit workforce is the fourth largest U.S. industry. With generally lower pay scales, the nonprofit stake in health benefit costs is unusually high since nonprofit employers have historically relied on decent benefits to attract and retain quality staff. But with steadily increasing health benefit costs, that is no longer possible for large numbers of nonprofits, according to the July 2009 survey conducted by Johns Hopkins researchers.

Other findings from the Johns Hopkins health benefits survey include:

* A striking 80 percent of the nonprofit respondents reported offering health insurance coverage for their employees. Nevertheless, the proportion not offering such coverage rose by 62 percent compared to the results from a comparable survey in 2004.

* Virtually all (99 percent) of the large nonprofits responding reported offering health benefits to employees but less than half (46 percent) of the smallest organizations did, and cost was a major factor at work.

* Nearly three out of every four nonprofits offering health benefits reported that their organization's total direct health insurance costs increased during the past year, and for over a third of the respondents the increase was over 10 percent-well above the national average of 5 percent per year.

* These recent increases come on top of increases in previous years: based on an earlier Listening Post survey of a comparable set of organizations, average health benefit costs for these organizations grew by nearly 40 percent between 2004 and 2009.  In the process, health benefits as a share of total employee compensation grew by over 12 percent, suggesting that health benefit costs are squeezing out pay increases and other aspects of employee compensation.

* The vast majority of nonprofit executives (80 percent of respondents) expect such increases to continue in the future, and about a third expect the increases to exceed 10 percent.

The 412 nonprofit organizations responding to the Listening Post survey included children and family service agencies, elderly housing and service organizations, community and economic development organizations, museums, theaters, and orchestras.

Click here to view the full text of the report "Health Care and Nonprofits: The Hidden Dimension of America's Health Care Crisis."
 
Social Accountability for Nonprofits - The View from the IRS - The Sept/Oct 2009 issue of AAHSA FutureAge contained an excellent article on the Internal Revenue Service's expectations of nonprofit organizations. It is worth reading.
 
There is no doubt that the Congress and the IRS are beefing up their scrutiny of nonprofit organizations.  A lot is at stake if nonprofit organizations don't fulfill their obligation to contribute to the greater community and the good of society.
 
Below are excerpts from the FutureAge article that include links on the IRS Web site designed to help tax exempt organizations with compliance:
 
Sarah Hall Ingram, IRS Commissioner for Tax Exempt and Government Entities, spoke at the Georgetown University Law Center in Washington, D.C., in June. Her presentation explained the thinking behind the IRS attention to governance, and outlined those aspects of governance the agency is most concerned with. The speech is available on the IRS and AAHSA Web sites. It is well worth reading for the leaders of aging-services organizations.
 
The Charities and Nonprofits section of the IRS Web site features "Life Cycle" tools to walk organizations through the process of setting up a tax-exempt entity and achieving ongoing compliance. The information is intended for new applicants and existing organizations.  Visit www.irs.gov/charities/index.html and click on the "Life Cycle" link in the left column.
 
To understand the IRS initiatives relating to organizational governance, see Commissioner Ingram's presentation, "Nonprofit Governance - The View from the IRS."
 
What You Should Know About ARRA 2009 - Experts from the Internal Revenue Service and the tax preparation industry will discuss the many tax credits, deductions and incentives contained in the American Recovery and Reinvestment Act (ARRA) for 2009 on the Oct. 6 Internet airing of Tax Talk Today.

• First-time homebuyers
• People purchasing new cars
• Energy efficient home upgrades
• Parents and students paying for college

To access the web cast at no charge, viewers can register online at Tax Talk Today.
Panelists include:  Virginia M. Tarris, IRS tax law specialist; Amy Stanton, IRS program manager; CPA Gerard H. Schreiber, Jr, partner, Schreiber and Schreiber; and CPA and attorney Donna Rodriguez, managing partner, Donna L. Rodriguez, PLLC.  The moderator is Les Witmer.  

Tax Talk Today is a free, live, interactive webcast aimed at educating tax professionals on the most contemporary and complex tax issues. Viewers are encouraged to submit questions during the live broadcast. Tax professionals in need of continuing education credits should select Continuing Education at the Web site for more information.
 
New Medicare Primer Available for Download -- The Kaiser Family Foundation issued a new primer that provides an overview of Medicare's financing and the fiscal challenges the program faces in the coming decades. As the nation's provider of health coverage for the elderly and people with disabilities, Medicare now covers 46 million American with total expenditures of $455 billion in fiscal year 2008, accounting for 15 percent of the federal budget, exceeded only by defense spending and Social Security. 

FAHSA General Membership Alert Page 

  

FMS Purchasing and Services Celebrates 20 years -- The year 2009 marks a most significant milestone anniversary in the history of FMS Purchasing and Services as they are now celebrating their twentieth year in business. They have been blessed over the years with an opportunity to have created wonderful relationships with customers, vendors and trade associations. It has been their sincere pleasure to run this company over the past five years and this would not have been possible without the dedicated, caring and passionate staff that has faithfully supported this endeavor. In celebration of their anniversary, they are pleased to present their new FMS corporate logo. You may observe that the traditional triangle design from their original logo proudly remains. This shape reflects the foundational cornerstone on which the company was founded, the areas of pricing, quality and service. They feel their new logo properly reflects a fresh, energetic and vibrant commitment to their never ending desire to deliver value to all they conduct business with and to always be recognized as a group purchasing organization that is "best in class". Many thanks for your loyal support over these initial twenty years. FMS looks forward to the future and the creation of many more great memories.They want to reinforce with much pride and a great deal of conviction, their company's mantra that they are humbled to be "Your Partner in Purchasing and Services". For more information and services providing by FMS Purchasing and Services, please click here.
 

 FAHSA's Preferred Business Associates Program (PBAs) -- A list of PBAs can be found by on the FAHSA Web site www.fahsa.org and selecting Preferred Business Associates from the left side menu bar or clicking on the FAHSA Preferred Business Associates Page hyperlink. FAHSA members can also use the on-line directory to search for PBAs by specialty.