What can be done for Nonprofit Health Insurance in Massachusetts?

MNN launched the Nonprofit Health Insurance Project (NHIP) in January 2009 in collaboration with the Blue Cross Blue Shield of Massachusetts Foundation to identify strategies and inform policies to enhance the accessibility and affordability of health insurance coverage for Massachusetts nonprofits and their employees. To do this, MNN assembled a task force of highly knowledgeable and qualified experts from various organizations and sectors; membership was diverse and included representatives from both legislative and executive branches of state government, advocates, nonprofit leaders, and health policy experts. Additional expertise was sought on a consultative basis to further develop the groups’ deliberations.Click here to download the full report.

Executive Summary of the Report:

Nonprofit organizations represent a vibrant sector of the Massachusetts economy employing approximately 14% of the Massachusetts workforce and providing countless programs and services contributing to the quality of life in the Commonwealth. In a study of nonprofits across Massachusetts published in early 2009, the issue of quality, affordable health insurance was cited as the number one benefits issue facing nonprofits in the Commonwealth.

Average premiums for family health insurance coverage have increased 119% nationally over the past 10 years, and Massachusetts’ insurance premiums are some of the highest in the country. Despite these facts, health insurance is the most commonly provided employee benefit in nonprofit organizations in Massachusetts, and data show it is a benefit nonprofits are committed to providing even when the financial indications suggest doing so is a strain on the organization.

The NHIP Task Force crafted policy and program options for further exploration within three broad categories: 1) policy options that would expand health insurance coverage and/or reduce insurance costs for nonprofits and nonprofit employees; 2) educational initiatives that would help nonprofits and their employees take fuller advantage of the programs and opportunities currently available; and 3) recommendations to stabilize employer sponsored insurance provided by nonprofits and to assist in nonprofits’ pursuit of compliance with the requirements of health reform. Specific options include the following:

  • Policy Priority Option #1: Expand the employer buy-in options available through the Connector to include access to CommCare, or a comparable product, for low-wage workers of qualifying small businesses by leveraging existing employer and employee premium contributions and providing subsidy for any remaining premium to those under 300% FPL.
  • Policy Priority Option #2: Harness the administrative sophistication, management and purchasing clout of the GIC for the benefit of the nonprofit community by creating a pool within the GIC through which nonprofits can purchase health insurance.
  • Policy Priority Option #3: Explore the possibility of creating one small group purchasing pool overseen by the Division of Insurance for all nonprofits and other small businesses in Massachusetts that requires participating plans cover all state mandated benefits and disallows exclusions for preexisting conditions; create incentives for small business participation.
  • Education Priority Options: Establish a multi-lingual, literacy-sensitive, small employer-based curriculum for training owners and managers, and their employees, on the issues of health insurance coverage and health reform; explore the possibility of establishing a hotline specifically for nonprofits and other small businesses modeled after the Health Care For All helpline for individuals.
  • Priority Options for Stabilizing Employer Sponsored Insurance in Nonprofit Organizations: Further clarify and amend the Fair Share Contribution requirements to make the provisions more easily understood and to recognize the financial limitations of nonprofit businesses struggling to provide employer sponsored insurance; research ways of better coordinating the enrollment procedures and coverage opportunities for individuals within various state-sponsored health insurance programs – such as Commonwealth Care, MassHealth, the Medical Security Program, the Insurance Partnership, and others; add ways of tracking health insurance coverage in the Massachusetts employer base by tax status (nonprofit and for profit).

In the next phase of the Nonprofit Health Insurance Project, MNN will pursue funding for additional data collection and research to further inform the priority policy options and to begin developing an outreach and education strategy for nonprofit employers and their employees. Ultimately, a blue-ribbon commission will be assembled to pursue the relevant and appropriate policy and program options based on the additional research findings and the outcome of federal health reform.

This project was funded through generous support from the Blue Cross/ Blue Shield Foundation

Prepared by:

Molly Yuska, M.M.
Yuska Solutions

With Support from
Cathy Dunham, Ed.D.
Executive Director
The Access Project
and David Magnani, Ed.D.
Executive Director
Massachusetts Nonprofit Network

How do I register to become a lobbyist

How do I register? Legislative and executive agents and lobbying entities register and report using an online system. Simply go to www.mass.gov/sec and click on the lobbyist reporting link. The reports are fairly straightforward but can take some getting used to. Many non-profits register and report in well under an hour per six-month reporting period. Make sure that email from lob@sec.state.ma.us is not caught in your spam filter! Additionally, lobbyists must now participate in an online or in-person training developed by the Secretary upon registration and annually thereafter. These trainings are currently being developed.

How much will it cost? Fees for registering as a legislative or executive agent (or both) are $100 and $100 for the “client,” i.e. the non-profit organization that employs the lobbyist. Some fees may be waived for non-profits. You must request a waiver in writing. Lobbyist entities like lobbying firms pay $1,000 plus an additional fee for each lobbyist they employ.

What are some of the main regulations nonprofits need to be concerned about complying with?

What are the different types of Nonprofit Organizations?

The federal government has distinguished between the different types of nonprofit organizations based upon their tax code designations. The list below cites the type of nonprofit organization and the corresponding tax code.

Please see the IRS 557 for detailed information on the differing regulations and requirements for nonprofits.

The following organizations are all exempt from income tax and are thus considered to be “nonprofit” by the federal government. 501(c)(1) Corporations Organized Under Act of Congress (including Federal Credit Unions):

  • 501(c)(1) – These are corporations organized under Act of Congress. Federal Credit Unions are a good example of this type of nonprofit. These nonprofits do not have to file an annual return. Tax-exempt contributions are allowed if they are made for exclusively public purposes.
  • 501(c)(2) – These are holding corporations for exempt organizations. That is, they can hold title to property of an exempt group. They apply for nonprofit status using IRS form 1024. They annually file forms 990 or 990EZ.
  • 501(c)(3) – This is the most common type of nonprofit. Generally, almost all donations made to 501(c)(3) organizations are tax-deductible.  It includes organizations that are religious, educational, charitable, scientific, and literary; groups that test for public safety, that foster national or international amateur sports competition; or organizations engaged in the prevention of cruelty to children or animals. There are five types of 501(c)(3) organizations:
  1. Private Foundations. These are nonprofits that don’t qualify as public charities. Foundations may be sub-classified as private operating foundations or private non-operating foundations, and receive some of the advantages of public charities.
  2. 509(a)(I) are publicly-supported charities.
  3. 509(a)(2) are exempt purpose activity-supported charities.
  4. 509(c)(3) are supporting organizations for 509(a) or 509(a)(2) charities.
  5. 509(a)(4) are public safety charities.
  • 501(c)(4) – These are civic leagues, social welfare organizations, and local associations of employees. They promote community welfare, charitable, education or recreational goals.  These nonprofits are often less restricted in lobbying than 501(c)(3)’s.
  • 501(c)(5)- Labor, agricultural, and horticultural organizations fit under this classification. They are educational or instructive, with the goal of improving conditions of work, and to improve products and efficiency.
  • 501(c)(6) – These organizations are business leagues, chambers of commerce, real estate boards, etc. They seek to improve business conditions.
  • 501(c)(7) – Social and recreation clubs fall into this category. They promote pleasure, recreation, and social activities.
  • 501(c)(8) – This category includes fraternal beneficiary societies and associations. They provide for the payment of life, sickness, accident, or other benefits to members.
  • 501(c)(9) – These are voluntary employees’ beneficiary associations. They provide for the payment of life, sickness, accident, or other benefits to members.
  • 501(c)(10) – Domestic Fraternal Societies and Associations. A lodge devoting its net earnings to charitable, fraternal, and other specified purposes. No life, sickness, or accident benefits to members.
  • 501(c)(11) – Teacher’s Retirement fund Associations. Associations for payment of retirement benefits.
  • 501(c)(13) Cemetery Companies. Loans to members.
  • 501(c)(14) – State Chartered Credit Unions, Mutual Reserve Funds.  Loans to members.
  • 501(c)(15) – Mutual Insurance Companies of Association. Provide insurance to members, mostly at cost.
  • 501(c)(16) – Cooperative Organizations to Finance Crop Operations. Finance crop operations in conjunction with activities of a marketing or purchasing association.
  • 501(c)(17) – Supplemental Unemployment Benefit Trusts. Provides for payment of supplemental unemployment compensation benefits.
  • 501(c)(18) – Employee Funded Pension Trust (created before June 25, 1959). Payment of benefits under a pension plan funded by employees.
  • 501(c)(19) – Post or Organization of Past or Present Members of the Armed Forces. Activities according to the nature of organization.
  • 501(c)(20)- Group Legal Services Plan Organizations.
  • 501(c)(21) – Black Lung Benefit Trusts. Funded by coal mine operators to satisfy their liability for disability or death due to black lung diseases.
  • 501(c)(22) – Withdrawal Liability Payment Fund. Provides funds to meet the liability of employers withdrawing from a multi-employer pension fund. No form to file. Tax forms 990 or 990EZ.
  • 501(c)(23) – Veterans Organization (created before 1880). Provides insurance and other benefits to veterans.
  • 501(c)(25) – Title Holding Corporations or Trusts with Multiple Parents. Holding title and paying over income from property to 35 or fewer parents or beneficiaries.
  • 501(c)(26) – State-Sponsored Organization Providing Health Coverage for High-Risk Individuals. Provides health care coverage to high-risk individuals.
  • 501(c)(27) – State-Sponsored Workers’ Compensation Reinsurance Organization Reimburses members for losses under workers’ compensation acts.
  • 501(d) – Religious and Apostolic Associations. Regular business activities. Communal religious community.
  • 501(e) – Cooperative Hospital Service Organizations. Performs cooperative services for hospitals.
  • 501(f) – Cooperative Service Organizations of Operating Educational Organizations. Performs collective investment services for educational organizations.
  • 501(k) – Child Care Organizations. Provides care for children.
  • 501(n) – Charitable Risk Pools. Pools certain insurance risks of 501(c)(3).
  • 521(a) – Farmers’ Cooperative Associations. Cooperative marketing and purchasing for agricultural producers.

How do I start my own nonprofit organization?

The process of starting a nonprofit organization generally involves:

  1. drafting bylaws which sets forth the structure of the organization and creates a governing board with final authority for the organization,
  2. incorporating as a nonprofit corporation in the state of choice,
  3. obtaining tax-exempt status from the IRS and the state in which the organization is based, and
  4. completing additional documents relating to state compliance, annual reporting requirements, newly instituted IRS compliance policies, and sound corporate record-keeping practices.

Developing bylaws and a board of directors. After discussion with the client regarding the purposes of the organization, options for structuring and comprising the board of directors, and basic operational and administrative mechanisms, we will draft the bylaws and an explanatory memorandum which outlines the most important points. A key, often-overlooked point of emphasis is the composition of the board of directors. In particular, it is important to carefully select the initial directors and determine the manner by which future directors are selected.

Incorporation. In most states this is a relatively simple procedure. The Articles of Incorporation generally include a number of the provisions already set forth in the bylaws.

Obtaining tax-exempt status from the IRS. The application and follow-up responses to the IRS are the most time consuming part of the process. Generally, the two substantive pieces of information required by the IRS are:

  • A statement of activities detailing, as specifically as possible, the proposed activities of the new organizations.
  • Estimated budgets for three years*

Below are some useful resources on how to begin the process of establishing your nonprofit organization:

*Source: Hurwit & Associates Nonprofit Law Resource Library.

How do I support the nonprofit sector and organizations?

Many nonprofits are looking for additional assistance and support. We recommend you reach out to the nonprofit organization and start a conversation about the organization’s goals and challenges to determine what issues are most critical for the nonprofit. The nonprofit may need help organizing itself, finding donations, reaching out to the community, or reaching out to legislators. The process of establishing and solidifying a nonprofit organization is complicated, but there is always something you can do.

We recommend that you explore opportunities are available for those who want to help a nonprofit organization, as well as the sector as a whole:

How can I volunteer with a nonprofit organization?

Numerous networks exist to help connect the Massachusetts Citizenry with the nonprofit sector! To begin:

  • Consider joining the Massachusetts Nonprofit Network, and attend one of our events. Your support and participation facilitates an ever-burgeoning network of nonprofit leaders and provides positive growth for our sector. Additionally, we invite you to browse through our events calendar, for non-training related convenings.
  • Contact our regional board representatives to see what opportunities exist in your area.
  • See what great types of work nonprofits are doing by exploring our members in your region.
  • Myriad resource-matching services exist to connect individuals with Massachusetts Nonprofits. While the links below are just the ‘tip of the iceberg,’ we invite you to let us know about other volunteer-matching organizations or mediums, so that we can continue to augment and support the nonprofit sector.*
    • All for Good is an open source application that allows you to find and share volunteer activities, and is endorsed by Serve.gov, by the The Corporation for National and Community Service.
    • Boston Cares organizes and leads team-oriented volunteer opportunities throughout Greater Boston that have a positive impact on individuals and communities.
    • Connect and Serve is a free volunteer web portal developed by the Massachusetts Service Alliance in collaboration with the Commonwealth of Massachusetts to promote volunteerism statewide. The Connect and Serve website is a valuable resource for organizations who wish to recruit volunteers and for individuals who wish to find fulfilling volunteer opportunities.
    • Idealist.org provides a nonprofit volunteerism search feature in addition to other opportunities.
    • My Social Actions makes it easier for people to find and share opportunities to make a difference through the aggregation of actions from the following sources.
    • Volunteer Match offers a variety of online services to support a community of nonprofit, volunteer and business leaders committed to civic engagement.
  • Participate in online discussion. Mission-Based Massachusetts is an email distribution list for people who care about nonprofit, philanthropic, educational, community-based, grassroots, socially responsible, and other mission-oriented organizations in the Bay State.

*Please note: The Massachusetts Nonprofit Network does not endorse or support the views expressed or the community service opportunities / social networks presented on this site nor does it endorse such opportunities or views listed beyond the massnonprofitnet.org domain.

What is the economic impact of the nonprofit sector in Massachusetts?

Nonprofit Sector Economic Impact In Massachusetts

Workforce

  • The nonprofit sector accounts for 14.6% of Massachusetts’ workforce—more than twice the national rate of 6.9%.
  • Massachusetts ranks 8th in the country for nonprofit workforce as a share of total workforce.
  • More people employed in nonprofit sector than in the entire public sector
  • 473,989 people employed in nonprofit sector in 2005 – ranked 8th in the country for number of people employed.
  • During recent five-year decline in Massachusetts employment of 4.1%, nonprofit sector added 33,000 jobs (9% increase).
  • 57% of nonprofit employees are college graduates, compared with 37% of all workers in the state.
  • Over 67% of nonprofit workers in Massachusetts hold professional or managerial positions, compared with 4% all workers.
  • In 2003, nonprofit workforce of 420,671 outnumbered most Massachusetts industries, including manufacturing, retail trade, construction, finance and insurance, and biotechnology.
  • Median individual income for nonprofit employees is $30,700 compared to $31,600 for the state’s workforce as a whole; incomes vary widely cross fields, with incomes in many fields (home health care, early education) well below the median.

Financial Impact

  • $137 billion in assets
  • Manage $2.5 billion in state contracts
  • Pump close to $50 billion into local Massachusetts economies annually, through salaries, purchases of goods and services, and other expenditures
  • $65 billion in income (2004)
  • All broad categories (health, education, etc.) posted double-digit increases in number of organizations between 2000–2004.
  • 60% of nonprofits report annual income under $250,000 and nearly half report annual income under $100,000.
  • Nearly three-quarters of the state’s nonprofits are less than 25 years old; 20 percent first filed with the IRS after the year 2000.
  • Nonprofit income and assets in Massachusetts are highly concentrated: the top 1 percent of organizations report 65% of total nonprofit income and hold nearly 80% of the sector’s assets.

Excerpts from “The Massachusetts Nonprofit Sector: An Economic Profile,” by Mass INC, March 2005

What are Massachusetts Nonprofit Sector Statistics?

While partnering with The Boston Foundation and Braver PC,  MNN undertook the first statewide survey of nonprofit employee benefits. Within our Nonprofit Employee Benefit Study, critical data derived from aggregate IRS filings concerning the makeup of the Massachusetts Nonprofit Sector became evident:

  • In 2007, the sector’s 36,748 nonprofits included 17,900 organizations that were non-filers and under $25,000 in budget size; 5,647 organizations that had budgets under $25,000 but did file the Form 990 with the IRS; and 7,655 organizations with budget sizes that ranged between $25,000 and $250,000. The total also included 5,380 organizations with budgets between $250,000 and $50 million and 166 organizations with budgets exceeding $50 million.
  • Grassroots organizations represent the fastest growing segment of the three types of nonprofits and have budgets under $250,000. In 2007, there were about 31,202 such organizations, which included 23,547 non-filing organizations and those with budgets under $25,000 and 7,655 with budgets between $25,000 and $250,000. They are largely concentrated in program areas related to Youth Development and Recreation; Arts, Culture & Humanities; Environment; and Education.
  • Safety Net organizations number 5,380 and have budgets ranging between $250,000 and $1 million. These organizations are typically concentrated in the areas of Housing, Human Services, Health & Medical and Community Capacity—industry sectors that provide a bulk of the safety net and quality of life services for communities.
  • Economic Engine organizations have $50 million or more in annual budgets. There are only about 166 public charities meeting this definition, but they are crucial to the state’s economy and are heavily concentrated in the areas of Education and Health Care.

More information on this research may be found in our publications section

What does the nonprofit sector do in Massachusetts?

The nonprofit sector is present in many different areas of Massachusetts’ network of social services and community development. From promoting the arts to planting gardens in urban communities, from establishing community health centers to encouraging small business development, the network of nonprofit organizations expands across the entire state, numbering over 9,700 organizations and employing more than 470,000 workers in 2005. The nonprofit sector is most strongly associated with social services like veterans associations, education and child care, and housing and community development. But nonprofits in Massachusetts also contribute to creative art communities, environmental protection efforts, and economic development at all levels of society.

The Massachusetts Nonprofit Network is an amalgamation of these critical sub sectors. Nonprofits employ nearly 14% of the Massachusetts workforce and are critical to the quality of life in the Commonwealth.