Can churches reimburse employee health care premiums?

For many years, churches have been permitted to reimburse employees for or directly pay the cost of individual health insurance policy premiums and exclude such amounts from the employee’s gross income. However, recent Internal Revenue Service guidance effectively eliminates these health care reimbursement plans after December 31, 2013. Group health insurance policy premiums paid directly…

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Does the church need to provide health insurance to their employees?

The answer is no. The church does not have to provide health insurance to their employees. Churches with less than 50 full-time equivalent employees for the previous calendar year are not required to provide health insurance. However, The Affordable Care Act requires most Americans to carry a “minimum essential coverage” health plan, or pay a…

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Health Insurance Reimbursement Laws Have Changed…Is Your Church Still In Compliance?

Churches are prohibited from reimbursing employees for the cost of their individual health insurance policies on a nontaxable basis, regardless of whether the coverage is purchased through a Marketplace or directly from a carrier. Any payment for individual health insurance will be taxable income. Group health insurance premiums for employees paid directly by the church…

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FSA? HSA? What do all these acronyms mean?

 Health Flexible Spending Account (FSA) – tax-advantaged account that allows plan members to set aside pre-tax dollars for eligible health care expenses. Money not used by the end of the year (or any grace period) is forfeited.  Health Spending Account (HSA) – allows both plan members and employers to make pre-tax contributions that can be…

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Flexible Spending Accounts

A flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan. An FSA allows an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly…

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Health Insurance Payroll Deduction…Taxable or Not?

In order for the payroll reductions for health insurance to be tax-free for employees, the church has to establish a POP (premium only plan) or FSA (flexible spending account) or a cafeteria plan. These benefit plans offer the employee the option to forgo part of his or her compensation on a tax-free basis in order…

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Health Care Reform Legislation Requires the W-2’s Show Value of Health Coverage

UPDATE 10/21/10: The IRS has announced that the health care reporting requirement will be optional in 2011 and mandatory in 2012.  From the IRS “to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with this requirement, the IRS will defer the reporting requirement for…

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