Tax Credit Extension Sought to Aid Rural Providers

Advocates are trying to persuade Congress to permanently extend a tax incentive program that helps small and rural healthcare providers obtain financing for building and expansion projects.

The New Markets Tax Credit Program was authorized in 2000 and last extended for two years on Jan. 1, 2013. The current push is to make the program permanent, which President Barack Obama supported in his fiscal 2015 budget proposal. In the House, Reps. Jim Gerlach (R-PA) and Richard Neal (D-MA) reintroduced legislation earlier this month that would make the program permanent rather than requiring reauthorization every two years. Similar bipartisan legislation was introduced in the Senate last summer.

Cuyuna Range Hospital District in Crosby, MN, is among the rural providers that have taken advantage of the program. The district, which operates 25-bed Cuyuna Regional Medical Center, wanted to finance a $15.7 million project last year to expand its operating rooms and surgical clinics. The program allowed Cuyuna to save 18 percent on its borrowing costs, or about $2.3 million. 

“It's a real opportunity for rural healthcare for expansion,” said John Solheim, Cuyuna Regional's CEO. “It helps you create equity and economic development.”

For healthcare providers, the program allows them to reap savings through a lower interest rate from lenders and makes them more attractive borrowers at a time when many rural hospitals are struggling to obtain financing.  

Read the full article in Modern Healthcare (requires a free subscription).  

Small Number of Colorado Businesses Use Health Insurance Tax Credit

Just 5 percent of Colorado small businesses are using a tax credit created as part of the Affordable Care Act, meant to encourage small businesses and nonprofits with low average wages to provide health insurance to their employees. To obtain the credit, a small business must have fewer than 25 full-time employees, pay average annual wages below $50,000 per full-time employee, and contribute at least 50% to each employee’s premium. The law provides a tax credit for up to 35% of the insurance premiums now, growing to 50% in 2014.”

According to Rhett Buttle, a spokesman for the Small Business Majority, small businesses don’t know about it. With all the political rhetoric going around about the ACA, folks weren’t focused on learning about it,” The Small Business Authority offers an online calculator for estimating whether an employer will qualify for the tax credit. Read more about the credit from Colorado Public News.