Impact of Health-Care Sharing Ministry payments instead of paying insurance premium?

by Connie
(Texas)

Healthcare Sharing Ministry Taxable Considerations

Healthcare Sharing Ministry Taxable Considerations

Our denomination's group health coverage monthly premium will go up in cost to over $1200.00 a month starting Jan. 1, 2016.


This is too much for our small church to be able to pay for the pastor.

Can he join a "health-care sharing" ministry and can the church pay the monthly 'share' (which is like the insurance premium) for him? Will it be considered income or will it be non-taxable?

Vickey's Reply

Connie, this is a very good question. I have been receiving similar questions the last few weeks, such as this one from Kary...

"Is Christian Healthcare considered a membership or Insurance? I know it is accepted under Obama care, but Do I include that on the minister's 941 and W2 forms?"

My answer to that post and this one is:

Healthcare Sharing is not considered insurance.

I belong to a healthcare sharing ministry too. I took this excerpt off their (Samaritan Ministries) site: "...healthcare sharing ministries satisfies the federal health care law’s (Affordable Care Act, U.S. Public Law 111-148) requirement that you have insurance or pay a penalty-tax (see 26 United States Code Section 5000A, (d), (2), (B))".

So we know that donating or memberships to a healthcare sharing ministries will keep us as individuals from having to pay the Affordable Care Act (ACA) penalties when we file our personal taxes; however...

from the research I have found the "payments/reimbursements to healthcare sharing ministries may constitute taxable compensation to employees because the arrangements do not meet the traditional definition of qualified group health insurance coverage."

Excerpt from Busby's publication: 5 Roads to Healthcare Reimbursements

You can find a link to that publication on Wisdom Over Wealth's Healthcare Tax Credit

Opinions?

I think that as healthcare premiums continue to soar...this is going to be a very hot topic!



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Nov 09, 2015
Impact of Health-Care Sharing Ministry payments instead of paying insurance premium?
by: Anonymous - MN

I don't have any references to site just now, but after checking several resources and asking folks in the Insurance industry and tax field we have treated this issue in the following manner for our staff:

- the only way we can really provide funds for our Staff to assist with covering the cost of their Health Care Sharing coverage is to increase their salary

- this amount is now in salary and there for will be taxable

- since several benefits are based upon their salary other benefits our Church provides will also increase, ie ... amount provided to help with SET, our contribution to their retirement accounts, etc.

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