More Tidbits on the New Tax Law

In my January E-Bulletin, I gave an overview of how the new federal tax law will affect nonprofit organizations. Now that we’ve had a bit more time for the dust to settle, here are a few links that dig a bit deeper into various nonprofit issues:

• Here’s a useful checklist of how your particular organization might be affected.
• A scathing analysis of Unrelated Business Income Tax impacts and how many nonprofits will be caught by surprise. Similar comments here from the Maine Association of Nonprofits.
• If your organization provides employee transportation benefits of any kind such as parking or transit passes, you need to pay heightened attention. Check out here and here for good explainers.
• The national nonprofit community continues to fend off Republican attempts to weaken or eliminate campaign restrictions for 501(c)(3) organizations. Read the latest here from MANP.

And if you’re fed up with watching Congress and the Maine Legislature put the needs of the nonprofit sector on the back burner, get out of the stands and onto the court. Start by attending a special MANP advocacy training on June 7 in Portland.

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Maine Supreme Court Case Raises Question of How to Take Care of Volunteers

In December, the Maine Supreme Court held in Huff v. Regional Transportation Program that an individual who received mileage reimbursement but no other compensation was not an “employee” for the purposes of Maine’s worker compensation law. The plaintiff had been seriously injured in an accident incurred while driving for the nonprofit Regional Transportation Program. I wrote about the facts and the implications of this case in my June 2017 E-Bulletin, where I generally advocated for the dismissal of the plaintiffs action. Thus, as a general matter I am pleased with the court’s decision.

At the same time, this case raises interesting questions about how to make sure that nonprofit volunteers have some level of protection in case they suffer an injury. Keep in mind that the court’s decision in Huff means that the plaintiff, who most likely is struggling financially, will not be able to access funds to pay for health care costs.  A commercial general liability policy, the most common kind of insurance for nonprofit organizations, typically provides very modest “Medical Payments” coverage of $5,000 to $20,000 for injuries incurred by volunteers. But the occasional CGL policy adds an endorsement that eliminates this coverage, so organizations will have to check their policy to know for sure.

Nonprofits that want to provide coverage beyond the CGL Medical Payments should inquire with their insurance agents about Volunteer Accident policies.  The policies pay for medical care on a reimbursement basis and can supplement the volunteer’s personal health insurance.  Coverage is usually affordable (a few hundred dollars per year) unless your organization has a large volunteer staff or engages in especially risky activities (e.g. sports related programming).  In addition to paying for medical expenses, the policies usually cover death and dismemberment and a limited income replacement.