A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at new community benefit provisions in the Affordable Care Act (ACA), which apply to some 78 percent of this country’s community hospitals. For some time, Section 501(c)(3) of the Internal Revenue Code has contained a “community benefit” standard, requiring nonprofit hospitals to generate activities promoting community health.
However, researchers have determined that many hospitals devote less than 8 percent of their revenue to these initiatives, which led lawmakers to include new community benefit requirements in the ACA. This policy brief examines the new guidelines, part of a strategy to complement the ACA’s preventive care and population health priorities.
The brief explains how the community benefit reporting requirements for hospitals have changed since the first income tax code was enacted in 1913. The most significant change came about in 2008, when the Internal Revenue Service (IRS) added the requirement that hospitals add a worksheet to their annual Form 990, detailing their community benefit activities. It also describes the new Section 501(r), added to the Internal Revenue Code as a result of the ACA, which spells out the requirements related to community benefits that nonprofit hospitals must meet to maintain their tax-exempt status.
About Health Policy Briefs
Health Policy Briefs are aimed at policymakers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. The briefs, which are reviewed by experts in the field, include competing arguments on policy proposals and the relevant research supporting each perspective.
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from Health Affairs Blog http://ift.tt/1RqC2YP
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