Small Business Healthcare Tax Credit Advances

What happened:  The Pennsylvania House Finance Committee held a public hearing on HB 2550, legislation that would establish a state tax credit for small businesses — including small nonprofits — that contribute to employee health insurance premiums through PENNIE, Pennsylvania’s state health insurance marketplace. The bill is co-sponsored by Finance Committee Chair Rep. Steve Samuelson and Reps. Jen Mazzocco and Arvind Venkat. It targets employers with fewer than 50 employees and would require equal contributions for all eligible employees. Committee Chair Samuelson indicated the bill could advance to a vote as early as June. 

Why it matters for nonprofits:  This bill is directly relevant for small nonprofits struggling to offer competitive health benefits. Sponsors framed the bill as a response to the expiration of enhanced Affordable Care Act premium tax credits at the end of 2025, which contributed to more than 130,000 PENNIE enrollees in Pennsylvania dropping their coverage for 2026. For small nonprofits that cannot afford traditional group health insurance, a tax credit tied to PENNIE contributions could meaningfully expand their ability to support staff health coverage — an important recruitment and retention tool in a sector competing against private sector wages. PANO believes that nonprofit employees deserve compensation and benefit packages that allow them to thrive. We also recognize that building the internal capacity to make that happen is a process for many organizations, especially those in earlier stages of growth — which is exactly why state-level tools like this credit matter. 

What nonprofits can do:  If your organization has fewer than 50 employees and is currently uninsured or underinsured, track this bill closely. Contact your state House member and communicate the value of expanded health coverage access for small nonprofits before the committee advances the bill. PANO will share updates as the bill moves. 

Where things stand:  The bill is in the House Finance Committee following this week’s public hearing. Chair Samuelson has indicated a committee vote could come in June. A companion co-sponsorship memo is also circulating among House members for a related Small Business Health Care Premiums Contribution Tax Credit. PANO will monitor both proposals.