Question:
What COVID-19 vaccine activities can be reported as community benefit expense on IRS Form 990, Schedule H?
Recommendation: We recommend reporting expenses associated with COVID-19 vaccinations similar to the way that flu and other community immunizations are reported in the following categories:
- Financial Assistance
For billed vaccine services, report uncompensated costs of free or discounted vaccinations provided to persons who cannot afford to pay and who meet the eligibility criteria for financial assistance described in the hospital's financial assistance policy ("FAP").
- Government-sponsored Means-Tested Health Care
Report uncompensated costs of vaccine services provided to Medicaid recipients and other patients who are insured by means-tested public programs for low-income persons.
- Community Health Improvement Services: Report the costs of vaccination activities where there is no patient bill, including:
- Community Health Education: Awareness and education activities for the community on vaccine safety and availability including production, translation and distribution of educational material, coordinating media response, public service announcements, and telephone hotlines for answering questions.
- Community-based free or nominal cost COVID-19 vaccinations for both patients and non-patients, offered to the broad community.
- Executive and other employee time spent planning for community vaccine services.
- Subsidized Health Services
Report costs when a program or clinical department as a whole loses money during a fiscal year after removing losses associated with financial assistance, Medicaid, other means-tested government programs, and bad debt. Losses for a COVID-19 clinical service line established by the hospital may be reported in this category.
- Research
Report costs of research conducted regarding the COVID-19 vaccine if the hospital intends to make or makes findings available to the public (e.g., shared across professional disciplines and organizations), and only if the research is funded by a tax-exempt source (e.g., government, a non-profit foundation, or the tax-exempt hospital itself).
- Cash and In-kind Donations
- Report cash contributions provided to community organizations and health care facilities that are restricted in writing to be used for community COVID-19 vaccination-related services and community education about vaccines (as described in Paragraph 3, above)
- Report costs of donated medical supplies, pharmaceutical supplies, and staff provided to other organizations and restricted in writing to be used to conduct training or provide COVID-19 vaccination-related services and education (as described in Paragraph 3, above).
- Community Benefit Operations
Report costs of community benefit program administration needed for COVID-19 community vaccination, fundraising or grant writing for COVID-19 vaccine-related services that meet the definition of one of the other community benefit categories described above.
Offsetting revenues
Note that any grants received by the organization that are restricted for one of these community benefit activities would need to be reported as offsetting revenue on Schedule H, to the extent the hospital uses those grants to fund any such activity and reports its expenses for that activity as community benefit.
Do not count:
- Lost revenue due to canceled appointments.
- Time spent by employees on their own time and the time of volunteers.
- The cost of vaccinating employees, including physicians, unless as part of a program/event open to the broad community. If employees, physicians, and patients participate in community events, open to the broad community, it is not necessary to exclude the cost of their vaccination services.
- The costs of vaccinating hospital patients and residents of long-term care facilities unless they receive the vaccination as part of a program/event open to the broad community. (The vaccination costs of patients meeting the eligibility criteria for financial assistance as described in the hospital's FAP is reported in Category 1, above. The vaccination costs provided to Medicaid recipients and other patients who are insured by means-tested public programs are reported in Category 2, above).
(February 2021)