Paying all deductible medical expenses

by Linda Pittman
(Taylors, SC, USA)

Our church has decided to not only pay pastors medical premium but the $2,500 deductible as needed and all prescription costs (as they are not covered under the medical insurance plan). These are benefits not included on his W-2. The only items on his W-2 are compensation and housing allowance. Is this legal? I am the church treasurer.

Comments for Paying all deductible medical expenses

Click here to add your own comments

Apr 09, 2015
Non taxable income
by: Anonymous

This is a great idea to help pastors reduce their taxable income. I have my support package divided in two portions: Salary which the HA comes out of and the Pastoral Expenses such as medical, miles traveled and other expenses.
Please check with a Christian CPA but this really is a good idea.

Apr 10, 2015
by: Anonymous

Thanks for the information. I just wanted confirmation that we were doing the right thing.

Apr 10, 2015
by: Vickey

HRA (Health Reimbursement Arrangement)and HSA (Health Savings Account) are legal; however, they must be set up correctly to be nontaxable. There are also limits on such plans.

Please contact a knowledgeable professional such as GuideStone Financial Resources ( to ensure your health reimbursements are handled properly.

Jul 01, 2015
The rules changed 1-1-2014
by: LibertyBelle

You may not be able to do this under the current regulations. The Affordable Care Act made changes in 2014. You can do it only under certain conditions now, such as if your pastor is the only employee of the church and he is not using the marketplace insurance. Search for info on Heath Reimbursement Arrangements to find out more.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Fringe Benefits.

Need training on how to use QBO or Aplos effectively for a church or better yet ...need an expert in either of those accounting software to do your monthly bookkeeping and/or payroll? See more on our accounting services!

Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.