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Category Archives: Healthcare Organizations

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Supreme Court Agrees Religiously Affiliated Hospitals Can Have “Church Plans”

The United States Supreme Court unanimously ruled in favor of religiously-affiliated hospitals and healthcare organizations in holding that a pension plan need not be established by a church in order to qualify for ERISA’s church plan exemption. Petitioners are religiously affiliated non-profit healthcare organizations appealing decisions by the Third, Seventh, and Ninth Circuit Courts of Appeal … Continue Reading

IRS and Treasury Release Annual Priority Guidance Plan

The IRS and Treasury Department have released their annual Priority Guidance Plan (the “Plan”) for the 2012-2013 fiscal year.  The 35-page Plan is available here and includes thirteen projects directly related to Exempt Organizations.  At least five other projects, such as final regulations under Section 170 regarding charitable contributions and guidance on Section 403(b) plans, … Continue Reading

Proposed Regulations on Federal Income Tax Exemption for Hospitals

As previously reported, the Treasury Department released proposed regulations on June 22, 2012 interpreting and implementing specific requirements for hospitals to maintain their Section 501(c)(3) tax-exempt status under Section 501(r) of the Code.  Section 501(r) was enacted as part of the 2010 Health Care Reform Act (the “Act”). … Continue Reading

IRS Releases 2010 Schedule H and Grants Automatic Three-month Extension of Time to File

As we have previously reported, the Affordable Care Act (the “Act”) included additional requirements for tax-exempt hospitals to maintain their tax-exempt status; these changes are effective for tax years starting after March 23, 2010, the enactment date of the Act.    These additional requirements included Form 990 reporting obligations for hospitals, which required some adjustments to Form 990 … Continue Reading

PPACA Emergency Room Reminder

Federal legislation often includes provisions that lead to unintended consequences. One such provision in the Patient Protection and Affordable Care Act (the “Act”) likely has left some hospital benefits managers scratching their heads: a requirement that certain group health plans may not impose greater restrictions on out-of-network emergency care services (Section 10101(h) of the Act).) Specifically, under … Continue Reading

Medical residents conclusively determined to be subject to FICA tax beginning April 15, 2005 under new U.S. Supreme Court decision

In Mayo Foundation for Medical Education and Research v. United States , the U.S. Supreme Court upheld the validity of a Treasury Regulation that states that the student exception from FICA (Social Security and Medicare) tax does not apply to medical residents because they work at least 40 hours per week. Applying the deferential two-part standard … Continue Reading

Attorney General’s Statement on Hospital Transfer Could Have Much Broader Implications

On October 6, 2010, Massachusetts Attorney General Martha Coakley released a report related to the proposed transfer of the Caritas Christi Hospital System ("Caritas") to Steward Health Care System LLC, an affiliate of Cerbeus Capital Management, L.P. The report ("The Statement") contains the Attorney General's analysis - under Massachusetts charitable law and the Attorney General's role as public charities' overseer -- of its five month evaluation and assessment of the proposed sale of Caritas to Steward, a newly-created for-profit entity, controlled, owned and funded by Cerberus, a private equity fund. The Statement can serve as a very useful primer or guide to any charitable organization and its board, not just healthcare organizations. … Continue Reading

Medical Resident FICA — Action on Individual Refund Claims

We have been closely following the medical resident FICA refund issue. As we noted in our blog entry in March on the topic, the IRS conceded that refund claims for FICA taxes for medical residents for the periods before April 1, 2005 will be paid. The IRS has now announced this month that it has begun sending letters to individual medical residents who filed individual claims for FICA refunds. These letters ask the individuals to submit copies of their claims. … Continue Reading

United States Supreme Court will Hear Medical Resident FICA Case

Many health care and medical education institutions have claims pending with the IRS for refunds of the FICA (Social Security and Medicare) tax paid on wages for employed medical residents. The issue for these claims is whether the residents are "students," and their wages accordingly exempt from FICA tax, for purposes of the student FICA exception in the Internal Revenue Code. Last summer, the Eighth Circuit Court of Appeals held that this regulation was valid in the Mayo Foundation for Medical Research and Education and the University of Minnesota cases. These institutions petitioned the Supreme Court for certiorari. Yesterday, the United States Supreme Court granted the certiorari petition and will hear the appeal. … Continue Reading

IRS to Honor Certain Medical Resident FICA Refund Claims

The IRS has announced that it plans to honor certain medical resident FICA refund claims for periods before April 1, 2005, when new IRS regulations went into effect. The IRS's brief announcement does not indicate the terms on which claims will be paid. Still, the IRS notes that verification of the claim amount will be required and interest will be paid. … Continue Reading

Tax Exemption Changes Possible for Hospitals as Part of Health Reform

Section 9007 of the health reform bill passed by the Senate on December 24, 2009 contains specific requirements for Section 501(c)(3) hospitals wishing to retain their tax exemption. This development is of interest to all exempt organizations, not just hospitals, because it is another example of Congressional action imposing specific standards on particular types of exempt organizations. … Continue Reading

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