New IRS rules will affect many pastors’ health insurance

Lisa Sergent —  April 16, 2015

Starting July 1, the IRS will implement a $100-per-day per employ excise tax on some churches, depending on the number of full-time employees they have, and how they cover health care premiums (IRS Notice 2015-17).

Churches with one full-time employee, and churches with two or more full-time employees in a qualifying group plan will still be allowed to provide pre-tax reimbursement for health care benefits. But churches with two or more full-time employees who have individual policies (or where one or more employees are on their spouse’s insurance plan), will not be allowed to provide pre-tax reimbursement. Those churches may be penalized.

Most pastors who have health insurance through GuideStone will not be penalized, because GuideStone coverage is considered a group plan.

For those who have individual policies and serve churches with two or more full-time employees that would be penalized, IBSA is exploring the option of providing an IBSA Group Associational Plan through GuideStone, which would meet the group policy requirement and protect the church from the excise tax. Pastors interested in this plan should contact IBSA by April 30, as IBSA will only pursue this option is there is sufficient interest.

Additional information is available at IBSA.org.

Contact SylvanKnobloch@IBSA.org or call (217) 391-3133.

Lisa Sergent

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Lisa is IBSA Director of Communications. A Missouri native, she moved to Illinois 22 years ago and arrived at IBSA a few years later. Lisa and her husband, Chris, have been married 19 years.