Church benefit plans

One-Person HRA (Section 105)

A tax-efficient way for a church to reimburse its one employee, often the pastor, for health insurance premiums and medical expenses.

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One-Person HRA plan package cover with plan pages

More benefit, at a lower cost than group insurance

A One-Person Health Reimbursement Arrangement is a formal Section 105 plan that lets the church reimburse its employee tax-free for individual or family health insurance premiums and out-of-pocket medical, dental and vision costs. The church sets the reimbursement limits and plan design.

  • One employeeOften the pastor
  • Church sets the limitsYou choose the plan design
  • Tax-free to the employeeMore benefit, no added tax
  • Plan documents includedPrepared for your church
Quick check

Is this the right plan for your church?

  1. Are you covering just one employee, such as your pastor?Yes: the One-Person HRA is built for that. No: go to question 2.
  2. Do you offer a group health plan to any employees?Yes: a QSEHRA isn’t allowed, but a CHOICE Arrangement can cover employee classes that aren’t on the group plan. No: go to question 3.
  3. Do you have fewer than 50 full-time employees?Yes: a QSEHRA (IRS limits, same terms for everyone) or a CHOICE Arrangement (you set the amounts by employee class). No: a CHOICE Arrangement.

Still unsure? Our guide Health Benefits for Churches walks through the decision, or book a Pro Advisor HRA session.

Why set up a One-Person HRA

Simple, flexible and tax-free

Tax-free to the employeeReimbursements increase effective compensation without increasing the tax burden.
Lower cost for the churchOften significantly less than traditional group health insurance.
Flexible and in your controlThe church sets reimbursement limits and plan design.
What can be reimbursed

Premiums and qualified medical expenses

  • Health insurance premiums (individual or family)
  • Co-pays and deductibles
  • Prescription medications
  • Vision care, exams, glasses and contacts
  • Dental care and orthodontics
  • Chiropractic and other eligible therapies
  • Long-term care services
  • Certain over-the-counter medications
Example in numbers

What tax-free reimbursement is worth

Suppose the church reimburses its employee $600 a month for family health insurance premiums: $7,200 for the year.

Through the One-Person HRA

  • Reimbursed to the employee$7,200
  • Federal income tax$0
  • Employee Social Security & Medicare$0
  • Church Social Security & Medicare$0
  • Employee keeps$7,200

Paid as extra salary instead

  • Added to pay$7,200
  • Federal income tax (12% bracket)$864
  • Employee Social Security & Medicare (7.65%)$551
  • Church Social Security & Medicare (7.65%)$551
  • Employee keeps$5,785

Illustration only, for a non-minister employee in the 12% federal bracket; state income tax not included. Ministers pay self-employment tax instead of Social Security and Medicare withholding, so their savings differ. Our team can run the numbers for your church.

How it works

Three simple steps

  1. 1Order in our storeAdd the plan to your cart and complete the enrollment form about your church.
  2. 2Benefits advisor reviewAn advisor checks your submission for accuracy, completeness and IRS compliance.
  3. 3Receive your plan packageYour plan document, SPD and forms arrive with easy signing instructions.

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What you receive

Your plan package

Prepared for your church and kept on file for compliance.

Resolution to adoptMeeting minutes recording the church’s decision to establish the plan as an employee benefit.
Customized plan documentThe rules, benefits and terms of your plan, prepared for your church and kept on file for IRS review.
Summary Plan DescriptionAn easy-to-read guide for employees with the federally required disclosures.
Election and claim formsPersonalized forms for employees to join the plan and submit expenses for reimbursement.

HRA Support Plan for Churches

Setting up the plan is the first step. Keeping it compliant takes ongoing attention. Add year-round help with eligibility questions, reimbursement rules, required plan updates, employee documentation and payroll reporting.

See the HRA Support Plan

Compare HRA plans

Which HRA fits your church?

CHOICE Arrangement
(formerly ICHRA)		 QSEHRA One-Person HRA
Best for Churches of any size that want to reimburse individual health coverage Churches with fewer than 50 full-time employees and no group health plan Churches reimbursing one employee, often the pastor
Contribution limits The church sets the amounts IRS annual limits apply The church sets the amounts
Employee groups Can vary by class of employee Same terms for all eligible employees One employee
Learn more CHOICE Arrangement QSEHRA You are here

Not sure which one fits? Our guide Health Benefits for Churches compares all three with a decision flowchart, church examples and a cost comparison workbook.

Related resources

Helpful next steps

Health Benefits for Churches guideCompares the QSEHRA, CHOICE Arrangement and One-Person HRA, with a decision flowchart, church examples and a cost comparison workbook.Pro Advisor HRA sessionA 30-minute one-on-one session with our team to talk through your church’s situation.HRA Support PlanYear-round help keeping your plan compliant after it’s set up.All church benefit plansPremium Only Plan, Health FSA, Dependent Care Assistance Plan and more.
FAQ

Common questions

Who is a One-Person HRA for?
Churches that want to reimburse one employee, often the pastor, for individual health insurance premiums and out-of-pocket medical, dental and vision expenses.
What if we hire more employees later?
A different plan may fit better as your staff grows. A QSEHRA or CHOICE Arrangement can cover multiple employees. See the comparison above, or ask our team.
Do I need the HRA Support Plan?
It’s optional. It gives you year-round help with required updates, documentation and reimbursement questions.
I already ordered. Where do I find my order?
Sign in to your account to see your orders and downloads.

Ready to set up your One-Person HRA?

Order in our store, or schedule a conversation with our team. Questions? Call (888) 421-0101.

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