So here we are – about 90 days into the Healthcare Plans Reform World. Most churches have made choices, and they hope they have chosen wisely.
And for these reasons, more and more churches are dissatisfied with the healthcare coverage they are providing. But now that Open Enrollment is effectively closed, is there something that can be done to provide a different form of coverage for clergy and staff?
Are there any paths still open?
I think so.
Churches may be underestimating the value of Employer Healthcare Plans.
This is a large discount that I believe American churches are failing to factor into their cost estimates of health care coverage.
For example, a policy costing the church $1500 per month, will receive a $6,300 refund next year from IRS. So what may appear as an $18,000 expense becomes $11,700 net expense.
Said differently, employer sponsored plans may be less expensive after the refund is “netted into” the final cost calculation.
Since Employer plans may be purchased on a non-calendar year basis, churches can convert their coverage model from individual coverage to a less expensive employer-sponsored plan at any time during 2014. And they may save money in the long run by doing so.
Our firm has recovered over $1 million of Health Care Refunds for American churches under this program. Call me at 617-921-9321 for a free consultation on the cost comparison for your church.
(End of update-4-7-14)
For almost five years Americans have been subjected to healthcare claims and counter-claims trying to predict what medical care in America will become under the Affordable Care Act (ACA).
Now the deadlines have arrived and “the law of the land” is taking effect.
Regardless of anyone’s political beliefs, the simple fact is that church leaders have a new compensation landscape to navigate.
Because of the many changes brought about by the ACA, churches should review their compensation packages. Wise leaders will not assume that their church’s 2013 compensation package is sufficient for 2014.
Among the many things that churches should evaluate are these.
a. Stop paying clergy as self-employed contractors that are reported via form 1099. Nearly every local church minister qualifies as an employee and should be compensated via payrolls and provided a W2 form at year end. Churches that do otherwise risk penalties and fines, and subject the minister to having otherwise tax-free benefits reclassified as taxable income.
William OConnell is the founder of Wisdom Over Wealth, a CPA ministry serving churches, Christian organizations and followers of Jesus Christ.
He may be contacted via the website www.wisdomoverwealth.com or at 617-921-9321.
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The following comments, tips, and Q/A were provided by FreeChurchAccounting's generous readers:
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Our Pastor is covered by Medicare and VA health benefits, due to his age and his previous service in the US Navy. Both of these are qualifying plans to …
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I was under the impression that christians could opt-out of the ACA if they were a part of a Healthcare cost sharing group like samaritanministries.org …
Is it legal for a church to pay a pastor's individual healthcare premium directly to insurance company?
We are moving away from a group insurance plan. The church would like to pay the Pastor's individual insurance premium directly to insurance carrier. …
Insurance Payment Reimbursements
Because of the new law that went into effect for insurance payments, the church can no longer pay the pastor's medical insurance unless it's a group insurance. …
Reimbursed Health Insurance Premiums and the W-2
The church that I work for has been reimbursing the secretary and the youth Pastor for their health insurance premiums. How do we show this on the w-2? …
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The comments above are for general information purposes only and do not constitute legal or other professional advice on any subject matter. See full disclaimer.