Many ministers and their employers are looking for alternative plans to control rising health care costs without neglecting those in need of medical services. Because of the new Affordable Care Act (ACA) requirements, the majority of churches need to re-think the medical benefits it offers to employees. If the church employs a single employee—a solo minister, the ACA has one set of requirements. (From our opinion, there is more flexibility when there is only a solo employee.) But for churches that employ two or more employees who participate in medical benefits, the ACA has stringent requirements. We suggest that you consult your own tax professional when offering medical benefits. The benefits the church offers may very well be 100 percent taxable to the employee.

Be aware that if a church covers the monthly share costs of an employee for a health-sharing plan (e.g., Samaritan Ministries International, Medi-Share, or Christian Healthcare Ministries), the amount paid by the church is subject to income tax for all employees and to FICA for all standard employees. The church needs to remember that health-sharing plans are not the same as health insurance plans.

This information is provided as a service of MinistryCPA.org to ministers and Christian ministries. Please contact us or your personal professional advisor to determine how this information may apply to your own situation.