New Obamacare Tax Law May Affect Churches

New tax rule in conjunction with the Patient Protection and Affordable Care Act may affect churches

“The Evangelical Council for Financial Accountability (ECFA) points out a viable option for churches affected by the rule, which is to increase employees’ overall taxable compensation without requiring that the additional income be used to purchase health coverage.”


A new tax rule in conjunction with the Patient Protection and Affordable Care Act may affect many churches that pay or reimburse individual health insurance premiums, and imposes daily fines beginning June 30 for those not in compliance.

GuideStone Financial Resources health plan participants should notice no impact as a result of the rule known as IRS Notice 2015-17, GuideStone said in a March 2 press release. Other churches whose employees do not participate in a group health plan could be affected.

“GuideStone health plan participants, and the organizations that employ them, can continue to pay for coverage as they have in the past and meet the guidelines under current law,” said Harold R. Loftin Jr., GuideStone general counsel. “For churches and ministries that use other providers, it’s important for them to review the IRS Notice, as well as work with their legal and accounting advisors to ensure they are compliant by the end of the grace period on June 30, 2015.”

The IRS notice clarifies guidance on the one-employee health plan exception from the market reform provisions of the Affordable Care Act, also known as Obamacare, as well as reimbursement arrangements for Medicare and TRICARE. The notice also provides relief for small business employers that had maintained premium reimbursement arrangements in 2014 and during the first half of 2015. Prior to the notice and its provision of this transition relief, some organizations could have been subject to penalties up to $36,500 per year, per participant, per violation, GuideStone said.

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