By Gary Skeen
Although it has been a while since I’ve blogged about the Affordable Care Act (ACA), by now many of you have experienced the insurance marketplace and settled on coverage for 2014. There has been significant news coverage about the number of people enrolled and those who have been able to find coverage, especially individuals who experienced previous difficulties in obtaining coverage.
Generally, I believe most churches have continued to obtain health insurance in the same way they have in the past. For those who have explored the Exchange Marketplace, some were successful, while others faced a few difficulties and roadblocks. For the churches that contacted us, I was impressed with their willingness to explore the new options available despite the myriad website issues and political rhetoric.
The biggest news significantly impacting churches has been the IRS’s recent ruling that reimbursements to church staff for independent health insurance purchases are now treated as taxable income.
You may recall that in a past column, I described the way churches have allowed staff to obtain individual insurance policies but reimburse the premium as pretax benefits under what I called an “informal reimbursement program.” I cautioned that if individual policies were purchased from the Exchange Marketplace, they could no longer be a pretax benefit. However, there had not been any guidance about purchasing those policies directly in the open market.
In its 2013-54 ruling, the IRS concluded that two of the ACA market reforms “apply to all group plans” with few exceptions and it defined group health plans to include plans under which “an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy … one arrangement under which the employer uses funds to directly pay the premium for an individual health insurance policy covering the employee” (which is collectively an employer payment plan).
I’m including a link to a CPA information newsletter by CapinCrouse which can provide further explanation and details.
One option that I have mentioned before is the Small Employer Option Plans (SHOP). This might be a possible solution for churches. Although it did not get off the ground last fall, it is now working and enrollment is not limited to calendar year coverage. However, you must still apply by phone or mail.
I know of one church that is currently exploring a SHOP plan option and canceling its individual policies for the remainder of the year. In this church’s state, there is a very cost-effective SHOP option that will save money and allow the church to provide coverage as a pretax benefit.
SHOP information is available through the www.healthcare.gov/marketplace/shop/— note that rates provided online show the cost if the employer chooses to play 100 percent of the premium for its employees note (you are not required to fund it at 100 percent). With online enrollment being delayed for SHOP plans, you may find it helpful to work with an agent to discuss different plan options. You may also want to refer to my past column on the SHOP program.
Our job at the Church Benefits Board is to serve the churches of the Cooperative Baptist Fellowship as well as CBF-affiliated organizations and help you navigate the benefits process. Your benefits are our ministry. If I can ever be of assistance, I and the CBB staff stand ready to help you. Call us at 800-352-8741.
Gary Skeen is President of the Church Benefits Board. For more information about CBB, visit http://www.churchbenefits.org/