You have heard about the Affordable Care Act but have you thought about how it affects you and your church? This is a rapidly changing landscape and there are many questions. Churches and pastors will need to stay current as policies are developed and changed. Here’s a few questions you should be asking:
Did you know your health insurance premiums may be considered taxable income in 2015?
If your church (your employer) pays for your health insurance and you are not on a group plan, effective July 1, 2015, health insurance premiums are considered taxable income. Your W2 will need to reflect this income and you will need to report it when you file your 2015 taxes. (Watch for updates though: Senator Grassley from Iowa is trying to get this decision reversed permanently–see attached.)
Did you pay taxes on your health insurance premiums in 2014?
The tax code IRS guidance has been amended for 2014. If you filed early and you reported your premiums in your income, you may be able to file an amended return. This will require additional paperwork on the part of your church (employer) so be sure to consult your tax professional prior to filing your amendment.
Are you the only full-time employee at your church?
Most tax experts are of the opinion that you may be exempt from the taxes due on insurance premiums if you have a HRA, Health Reimbursement Arrangement.
Are churches required to provide insurance to their employees?
Organizations with 50 or more full-time employees are required to provide insurance. However, if your church is providing insurance for any full-time employee, they must offer it to ALL full-time employees.
These are just the tip of the ACA iceberg and it’s changing daily. It’s important to be informed. Talk to your tax professional and insurance provider for more information.