How To Meet Affordable Care Act Requirements As A Nonprofit

Did you know that nonprofit organizations are affected by the Affordable Care Act (ACA) just like all other employers in the U.S.? 

In fact, nonprofits are required to file appropriate ACA tax forms annually, especially if they have 50 or more full-time equivalent employees. 

Originally due on January 31, insurers, self-insuring employers, large employers, including nonprofit and tax exempt organizations, and other coverage providers now have until this Friday, March 2, 2018 to provide ACA health coverage information to individuals they cover. 

This automatic 30-day extension provides insurers and employers extra time to furnish required Form 1095-B or Form 1095-C statements to employees or covered individuals.

Statements provided to these individuals are used to determine whether they will claim the premium tax credit on their tax returns, so it’s extremely important that you have them filed and distributed on time.

Where Can My Exempt Organization File ACA Forms Online?

Your organization can easily file ACA forms online with our sister product, TaxBandits! 

Filing both Form 1095-B and 1095-C with TaxBandits is extremely easy and can be completed quickly. 

Here’s some info on what you’ll need to complete the filing process and stay in compliance: 

ACA Form 1095-B & 1095-C

Form 1095-B

Form 1095-B is used to report certain information regarding minimum essential health insurance coverage to the IRS and individuals. This form is typically issued by insurance providers, including insurance companies, self-insured employers, employers with fewer than 50 full-time employees, and other agencies that provide health insurance coverage.

Information Required to E-file Form 1095-B

• Employer Details: Name, EIN, Address, and Contact
• Employee Details: Name, Social Security, and Address
• Employee Offer/Coverage Data and Codes
• Covered Individual Details

Form 1095-C

Form 1095-C is the annual statement that applicable large employers (ALEs) use to report to the IRS about the insurance offered to its large number of full-time employees.

Information Required to E-file Form 1095-C

• Employer Details: Name, EIN, Address, and Contact
• Employee Details: Name, Social Security, and Address
• Employee Offer/Coverage Data and Codes
• Covered Individual Details

You can even make corrections to any form that’s rejected by the IRS! It doesn’t get any better than this! 

Meet the March 2nd Deadline

Easily meet the upcoming March 2nd deadline when you file with our sister product, TaxBandits. As always, the ExpressTaxExempt team is here to help your organization in any way that we can. Contact us for any other questions or concerns about the filing process - we’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message at your convenience with support@ExpressTaxExempt.com.

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New Product Perfect for Exempt Organizations Officially Launches

There’s a new product on the block that your organization can benefit from greatly!

Today our parent company SPAN Enterprises officially launched its latest product, TaxBandits. 

TaxBandits is the ultimate e-filing solution for small businesses and nonprofit organizations. Offering the most simplified and streamlined, interview-style e-filing process, TaxBandits helps to keep you moving in the right direction. 

Helping you and your organization achieve greatness, TaxBandits provides necessary IRS forms at your fingertips. 

The following tax forms can be filed on one website to accommodate the needs of all of our clients:

Form 990 Series: Form 990-N, Form 990-EZ, Form 990, Form 990-PF, Form 1120-POL, and Form 8868.

Form 94x Series: Form 941, Form 941-PR, Form 941-SS, and Form 941 Schedule R

Form 1099 Series: Form 1099-MISC, Form 1099-INT, Form 1099-DIV, Form 1099-R, Form 1099-S, Form 1099-B, Form 8809, and Form 1099-Correction

W-2 Forms: Form W-2 and Form W-2c

ACA Forms: Form 1095-B, 1095-C, 1094-B, and 1094-C

Extensions: Form 8809 and Form 8868

Exempt Organizations & TaxBandits

Tax exempt organizations will benefit greatly from the convenience of TaxBandits. Whether you have to handle annual Form 990 filing for your organization or need to submit Form 1099 or Form W-2 information for its employees, the comprehensive TaxBandits software covers it all! 

The TaxBandits Experience

TaxBandits believes that while taxes can be complicated, solid research paired with great customer service, along with accurate and efficient software, your tax filing experience will be much easier.

Our U.S.-based customer support team assures that we will answer your call faster than the IRS. TaxBandits constantly strives to lead its clients as a compassionate resource, guiding you through complicated tax matters and making the e-filing experience as accurate and efficient as possible.

E-file My 2018 Employment Tax Forms

TaxBandits For You! Quick & Easy Online Tax Preparation

Contact Us

Feel free to contact us with any questions that you may have. Phone support is available Monday through Friday, 9:00 a.m. to 6:00 p.m. EST at (704) 684-4751. Reach us 24/7 via email support at support@TaxBandits.com or by Live Chat and we will give a speedy response.

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Tax-Exempt Hospitals Must Comply with Section 501(r) Regulations

Section 501(r) regulations provide guidelines on how hospitals retain their tax-exempt status. These requirements were implemented to the Internal Revenue Code by the Patient Protection and Affordable Care Act back in 2010. Failing to comply with the following rules will cause hospitals to lose their tax exemption:

• Meeting the Community Health Needs Assessment (CHNA) conditions of Section 501(r)(3)
• Following the Financial Assistance Policy (FAP) necessities of Section 501(r)(4)
• Ensuring that charges for emergency and other medical care for patients with FAP don’t surpass amounts typically billed to patients with insurance
• Preventing any outstanding payment collections before making rational efforts to determine if the patient qualifies for assistance under FAP

Other penalties include a $50,000 excise tax towards hospital organizations failing to meet the Community Health Needs Assessment for the filing year.

Regulations imposed by Section 501(r) went into effect for the taxable year starting after December 31, 2015, and applies to hospital organizations - including government hospital organizations - seeking tax-exempt recognition under Section 501(c)(3). Some government hospitals aren’t responsible for filing IRS Form 990 or submit CHNA information with a 990 form; however, they are still required to make their CHNA and FAP reports publicly available.

Even though failure to comply with Section 501(r) regulations may cause the IRS to revoke tax-exempt status from a hospital, federal officials consider the following facts before revocation:

• The primary reason for failure
• The importance and nature of the failure
• Whether or not the hospital failed requirements in the past
• The number, extent, and significance of facilities that failed if applicable
• Whether the hospital had practices and procedures in place to ensure overall compliance before failing
• Whether the hospital quickly corrected the failure and enforced any safeguards to prevent future failures
• Whether staff regularly followed compliance practices and procedures and the failure happened from some mistake or oversight

Overall, any omissions from a report or errors in operational requirements that are minor, or otherwise accidental due to reasonable causes, are not seen as failing to meet regulations.

An Accountable Care Organization (ACO) is exempt from following Section 501(r) guidelines, but multiple medical facilities are allowed to duplicate the same FAP and other policies as long as it’s the same for each facility. Furthermore, separate hospitals within the same community can perform a joint community health needs assessment and create a joint strategy meeting those goals.

If a health system operates multiple hospitals and one facility fails to meet requirements, that failure will not affect the exemption status of the overall health organization. The IRS may impose a corporate hospital facility tax towards the non-compliant facility for the year it failed compliance. Operations from the failed facility are not seen as unrelated trade or business nor will finances for the non-compliant hospital be affected.

Experts recommend board members of nonprofit hospitals to review regulations from Section 501(r) and carefully examine their healthcare policies to ensure compliance. And remember to file the required 990 form, if applicable, along with the Schedule H.

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Tax-Exempt Retention for Hospitals

With the most recent changes in tax-exempt requirements and healthcare reform, nonprofit hospitals are facing several challenges with exemption classification and retention. Experts say that nonprofit hospitals receive about $13 billion in tax exemptions annually - that’s a significant amount of money that law officials believe can efficiently fund federal, state, and local programs, if imposed.

However, the opposition argues that enforcing taxes on nonprofit hospitals will not only affect staff, medical programs, and equipment but also lead to higher payments for patients. Even though there is no mandated threshold, state laws typically expect a nonprofit hospital to provide charitable services that value over 1% of gross receipts.

Here are a few other suggestions from tax professionals about maintaining tax-exempt status for a nonprofit hospital:

• Comply with the new tax-exempt requirements established by the Patient Protection/Affordable Care Act (PPACA)
• Express the hospital’s capabilities of accepting Medicaid and Medicare patients and services for low-income patients
• Develop rebuttable cases that show reasonable compensation relationships
• Build and retain documents showcasing charitable benefits and charity care the hospital annually provides for the community
• Prove that any money received for community benefit purposes is used exclusively for that activity such as medical research or health education

State courts have also established reasons that can prevent tax-exempt entitlement for a nonprofit hospital:

• Little or no patients receive free or discounted care
• The value of free care provided is minimal
• Immediately refers unpaid bills to collections
• Charges full rates for uninsured patients
• Fails to provide straightforward benefits to the community it serves

It’s critical for board members to review their hospital’s methods and operations each year and ensure that they’re following the guidelines to classify as tax-exempt. It’s just as important as being compliant with the IRS and filing your annual 990 form with Schedule H.

ExpressTaxExempt’s cloud-based service allows nonprofit organizations and hospitals to file 990 forms, schedules, and extensions quicker and easier than paper filing. Contact our U.S. - based customer support team for any questions or assistance with electronically filing tax-exempt returns. Call us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message to support@ExpressTaxExempt.com.

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