1. AHA PMG CHAPTERS Affiliation Agreement Update June 5, 2013 1 p.m. CT 1

2. Agenda Welcome & Introductions AHA Affiliation Agreement - Liz Summy, VP, PMGs Update on the tax exempt environment – Paula Goedert, Esq. AHA Chapter Tool Kit – Paula Goedert, Esq. Preparing and filing articles of incorporation Obtaining an EIN Preparing and filing Form 1024 – application for recognition of exemption Preparing and filing the Federal Information Return with the IRS Tips for obtaining insurance – Liz Summy Tips for obtaining a bank account in the Chapter’s name - Liz Summy Open Q&A – Liz Summy & Paula Goedert 2

3. AHA Chapter Affiliation Agreement Defines the relationship between AHA/PMGs and their affiliated chapter as legally separate entities Defines criteria for affiliation Minimum Membership Membership in Common Governance and Tax documents Minimal reporting 3

4. Tax Exempt Organizations Background Current Environment A view to the future 4

5. Chapter Affiliation Toolkit 5

6. AHA Chapter Tool Kit Communication Documents Executive Summary – message to Chapter leaders Email Blast to Chapter leaders (same as Tool Kit Executive Summary message) Letter to Chapter Leaders explaining Tax Exemption Instructions AHA/PMG Chapter Affiliation Agreement (CAA) Sample agreement (AHRMM) Sample style guide for managing the brand 6

7. AHA Chapter Tool Kit Must Haves For All Chapters Bylaws Federal Employer Identification Number Minutes Incorporation Incorporation: Why and How Articles of incorporation 7

8. AHA Chapter Tool Kit Tax Exempt Status Tax exempt status (501 C3, 4 or 6) Application for Tax Exempt Status Tax filings 990, 990EZ or 990N 1099 if relevant 8

9. AHA Chapter Tool Kit Insurance Link to webinar recordings PMG chapter website contents Membership Recruitment Tips Membership Roster Template Tips for Securing a Bank Account Year End Chapter Report Template 9

10. Sample Chapter By-laws Should have by-laws regardless of incorporation status Sets forth who can be a member and How the organization is governed Once adopted, by-laws can only be changed according to the process described in the by-laws. Be practical 10

11. Obtaining an EIN Each chapter must have Federal Employer Identification Number (EIN), whether incorporated or not. EIN is similar to a social security number for an entity How to: Complete form SS-4 (online at www.irs.gov) Follow the instructions for completion Can be filed online The EIN will be sent to you the same day 11

12. Application for EIN (SS-4) 12

13. Minutes Each chapter must keep minutes of board meetings and meetings of members Key points – Board Minutes Record the date and time of the meeting Which Board members were in attendance Business discussed Resolutions passed Key points – Member minutes Record the date and time of the meeting Whether a quorum of members was present Business discussed Resolutions passed 13

14. Preparing & Filing Articles of Incorporation Each states’ form is different Incorporation protects members from liability 14

15. Application for Tax Exemption (Form 1024) Forms differ for c3, c4, and 6c organizations C6 is the way to go! 1024 is relatively simple 15

16. Annual Reports to the IRS Each exempt organization must file some version of Form 990: either the regular 990, the 990 EZ, or the 990-N. Form 990-N can be filed by organizations with less than $50,000 in gross revenue averaged over 3 years. Failure to file the appropriate Form 990 can result in fines and penalties. Key points: The IRS will reject its Form 990 if it does not recognize the entity as tax-exempt. Entities which are not tax-exempt must file Form 1120 and pay federal income tax on profit. If an entity is required to file Form 1120 and fails to do so, it can be charged with civil fines and penalties and also criminal penalties. If it is unincorporated, its members can be personally responsible for these fines and penalties. 16

17. Form 990, 990-EZ 17

18. Association Business Insurance Solutions Nonprofit organizations should be operated and managed with at least the same degree of care as for-profit corporations. Directors and Officers are subject to three basic duties in executing their obligations: 1. Duty of Care – act prudently 2. Duty of Loyalty – act in the best interest of the organization 3. Duty of Obedience – adhere to the organization’s bylaws

19. Obtaining Insurance Management Liability Insurance Directors and Officers (D&O) Liability Insurance Employment Practices Liability Insurance (EPLI) Professional Liability Insurance – Errors & Omissions (E&O) Coverage Fiduciary Liability and/or Employee Benefits Liability Crime and/or Fidelity Coverage Key Point Chapter Affiliation Agreement requires insurance

20. ASAE and AON forms

21. Securing a Bank Account Healthcare Associates Credit Union Agreement with the AHA and several state hospital associations, healthcare associations, and healthcare organizations Checking, savings, and money market accounts Credit and debit cards Simple application Proof of incorporation P.O. Box address is acceptable 21

22. Healthcare Associates Credit Union 22

23. Securing a Bank Account Norma Cantrell Director of Business Development Healthcare Associates Credit Union Phone: 630-276-5730 Email: ncantrell@hacu.orgncantrell@hacu.org www.hacu.org 23

24. REMEMBER … Refer to the Chapter Tool Kit (may be revised from time to time) Contact your Chapter Liaison Access resources on your PMG Chapter webpages 24