New Federal Guidelines For ACA Healthcare

January 2, 2015       The NonProfit Times      

The Internal Revenue Service (IRS) and Department of Treasury this week issued guidance on requirements for nonprofit hospitals as a result of the Affordable Care Act (ACA).

Nonprofit hospitals are required to meet four general requirements:

  • Establish written financial assistance and emergency medical care policies;
  • Limit amounts charged for emergency and other medically necessary care to individuals eligible for assistance under the hospital’s financial assistance policy;
  • Make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s policy before engaging in extraordinary collection actions;
  • Conduct a community health needs assessment (CHNA) and adopt an implementation strategy at least once every three years.

The first three requirements are effective for tax years beginning after March 23, 2010 and the CHNA requirements are effective for tax years beginning after March 23, 2012.

The ACA added new section 4959, which imposes an excise tax for failure to meet CHNA requirements, and adding reporting requirements under section 6033(b) related to section 501(r) and 4959.

These final regulations provide guidance on the requirements described in section 501(r), the entities that must meet these requirements, and the reporting obligations relating to these requirements under section 6033. The final regulations also provide guidance on the consequences for failing to satisfy the section 501(r) requirements.