NASAA Notes: April 2010


Thomas L. Birch Headshot

Thomas L. Birch

April issue
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April 8, 2010

Health Care Law and Nonprofit Employers, Education Act Reauthorization Begins

The health care reform measure signed into law by President Obama on March 23, 2010, provides assistance to small businesses and to nonprofit organizations in providing health insurance to their employees. The final health care package, the Patient Protection and Affordable Care Act, provides a tax credit beginning in 2010 through 2013 for businesses and nonprofit organizations with fewer than 25 employees and average wages below $50,000. During those three years, the bill permits a credit for small employers that provide insurance for their employees, and beginning in 2014, credits are available to employers purchasing employee coverage through health insurance exchanges.

Nonprofits can take a credit in the initial period of 25% of the employer contribution and 35% in subsequent years, and apply the credit to taxes they withhold from payroll. Employees still would receive full credit for taxes withheld from their pay.

During the development of the health care reform legislation, the Senate’s bill included provisions to treat nonprofits and for-profits equally. Before Congress had moved to final enactment of the health care legislation and passed the Senate-approved version of the bill, the measure passed last November by the House had not included any provision to help nonprofit employers with paying for health care insurance for their employees; tax credits were given only to for-profit businesses in the House bill. In January, a group of representatives led by Rep. Betty McCollum (D-MN) sent a letter to House Speaker Nancy Pelosi (D-CA) urging the adoption of the Senate small employer tax credit that expressly applied to nonprofit employers.

The final result ensured that the bill would include incentives to help all smaller employers provide health insurance for their employees. In 2005 (the most recent year for which data are available), nonprofits paid more than 4.6% of their total expenditures for health care coverage. According to the National Federation of Independent Business, health insurance costs for small firms have increased 113% since 1999. As rising health care costs become an increasing concern for nonprofit organizations, the employer incentives offered by the health care reform legislation are intended to ease the burden.

Education Act Reauthorization Begins

The House and Senate committees responsible for the reauthorization of the Elementary and Secondary Education Act have begun holding hearings on overhauling the statute currently known as No Child Left Behind. Both the Education and Labor Committee in the House and the Health, Education, Labor and Pensions Committee in the Senate are working in a bipartisan way to rewrite the law.

NASAA and our colleagues involved in advocacy on arts education policy concerns have submitted legislative recommendations to both committees urging Congress to:

  • Retain the arts in the definition of core academic subjects
  • Amend the law to require annual state reports on the status and condition of all core academic subjects
  • Amend the Education Sciences Reform Act of 2002 to require a National Assessment of Educational Progress in the Arts once every five years, in grades 4, 8, and 12
  • Require the National Center for Education Statistics to collect and disseminate full and complete statistics on the condition and progress of education at the preschool, elementary, secondary, postsecondary, and adult levels in the United States in all core academic subject areas
  • Reauthorize the Arts in Education Programs of the U.S. Department of Education

State Department Cultural Exchange Gains in Fiscal Year 2010 Funding

The final omnibus funding bill for FY 2010 for the State Department included report language allocating an increase of “at least $3,000,000 from the increase provided for fiscal year 2010 to expand exchange programs and activities in the visual arts, performing arts, film, arts education, arts management, and cultural studies.” NASAA had joined other arts advocacy organizations in urging Congress to allocate increased resources to international cultural exchange.

What’s more, we had proposed that Congress instruct the State Department to improve its grant application process to be more accessible to interested applicants. In response to that request, the report from Congress also instructs that “the funds for expanding arts programs and activities be awarded on a competitive and transparent basis in accordance with all applicable rules and regulations.”