Church Paying Medical Expenses Considered Income?

In addition to paying the premium on our Pastor's Individual insurance plan our church has decided to cover certain additional medical and dental expenses not covered by the plan. If we pay these bills directly would this have to be considered part of our Pastor's salary?

Answer

You can pay or reimburse medical expenses for your pastor if they are covered under an employer-sponsored plan such as a HSA (Health Savings Account) or a FSA (Flexible Spending Account) or a Cafeteria Plan, etc.

However, these plans are difficult to set up properly. You should consult a CPA or tax attorney to set up such a plan.

Hope this helps,
Church Accounting Package

www.freechurchaccounting.com
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2Comments

Thanks!

AAnonymous

Thanks for pointing me in the right direction!

Individual Health Insurance Plan

AAnonymous

Are the Individual Health Insurance premiums which we pay on his behalf not considered taxable income even though since it is an individual plan instead of a group plan it is under his name?

Vickey's reply
I am not sure, but I know where you can probably find out :-)
There is a very good site that has some experts (CPAs and tax attorneys) that answer questions such as yours. There is also a category titled insurance that you can either search their questions and answers section or ask the experts yourself. It is located on this page.
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