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Board Awards Record $190.2M Read Full Press Release

Pension Fund of the Christian Church

Employer-Sponsored Retirement Products

Overview

As a church plan, Pension Fund is able to offer flexible and worry-free retirement options for employers and their employees. Our team of Area Directors will meet with you to discuss your needs and help you get started.

Individual Savings & Retirement Products

Overview

Whether you’re just starting out or closer to retirement, choose from a variety of products to help you reach your retirement and savings goals.

Program Applicants

Ministerial Relief & Assistance

Our relief programs meet the evolving needs of new, active, and retired clergy and their families to ensure all ministers and lay workers can enjoy a strong, smart, secure retirement.

Supporters & Donors

Make An Impact with a Donation

Your gifts and financial support helps ministry workers in need bridge the unexpected from now until retirement (and beyond).

Resources

Overview

Discover planning and educational tools & resources to help you navigate your financial wellness journey.

For Members & Clergy

For Members

Guides, factsheets and resources to aid you on the Road to Financial Wellness.

For Clergy

Clergy-specific resources to support your call to ministry.

For Employers

For Employers

Hiring tip sheets, tax guides and more to help you manage your employees' benefits.

Your Money Line

Pension Fund has partnered with Pete the Planner® to provide members with access to financial guides who will help answer your tough financial questions & online tools such as calculators and eLearning courses.

Stay Connected

News & Publications

Events

The Gathering

Pension Fund's biennial conference that connects pastors to learn and discuss spiritual, health & financial wellness.

Employer-Sponsored Retirement Products

Overview

As a church plan, Pension Fund is able to offer flexible and worry-free retirement options for employers and their employees. Our team of Area Directors will meet with you to discuss your needs and help you get started.

Individual Savings & Retirement Products

Overview

Whether you’re just starting out or closer to retirement, choose from a variety of products to help you reach your retirement and savings goals.

Program Applicants

Ministerial Relief & Assistance

Our relief programs meet the evolving needs of new, active, and retired clergy and their families to ensure all ministers and lay workers can enjoy a strong, smart, secure retirement.

Supporters & Donors

Make An Impact with a Donation

Your gifts and financial support helps ministry workers in need bridge the unexpected from now until retirement (and beyond).

Resources

Overview

Discover planning and educational tools & resources to help you navigate your financial wellness journey.

Your Money Line

Pension Fund has partnered with Pete the Planner® to provide members with access to financial guides who will help answer your tough financial questions & online tools such as calculators and eLearning courses.

New Tax Rules For Health Care Reimbursement

Since 1961, IRS Revenue Ruling 61-146 has authorized employers to reimburse employees on a pre-tax basis some or all of the cost of purchasing individual health insurance coverage. Many congregations have relied on this revenue ruling to reimburse pastors and lay employees for the cost of individual health insurance coverage or to pay the premiums for such coverage directly to the insurance company on behalf of employees. These arrangements are commonly referred to as employer payment plans, and are sometimes provided through stand-alone health reimbursement arrangements (HRAs).

The IRS recently began to issue guidance as to application of the Affordable Care Act (ACA) coverage mandates to employer payment plans and stand-alone HRAs. In Notice 2013-54, issued on Sept. 13, 2013, the IRS held that pre-tax reimbursement of individual health insurance premiums, or direct payment of individual health insurance premiums through a stand-alone HRA, creates a group health plan thajavascript:void(null);t fails to satisfy the ACA's coverage mandates. In additional guidance issued on Nov. 6, 2014, the IRS provided that even if an employer reimburses premiums under an employer payment plan or directly pays individual health insurance premiums on an after-tax basis, the arrangement is a group health plan that fails to satisfy the Affordable Care Act's coverage mandates.

The Nov. 6, 2014 guidance further prohibits an employer from offering cash to an employee who has high claims in exchange for the employee agreeing to waive coverage under the employer's health plan. The guidance states that this type of arrangement violates the HIPAA nondiscrimination rules and creates an illegal election between cash and a nontaxable benefit.

Accordingly, this IRS guidance means that a congregation can no longer reimburse an employee for the cost of his or her health insurance policy or pay the cost of such policy directly to the insurer, on either a tax-free or an after-tax basis, regardless of whether the coverage was purchased through the health marketplace or through the private market, without incurring significant penalties. Failure to satisfy the Affordable Care Act coverage mandates results in a $100 a day penalty for each violation per employee, and employers are required to self-report violations to the IRS.

Churches that currently offer employer payment plans - on either a pre-tax or after-tax basis - should replace those plans immediately with another option to avoid substantial penalties. Alternatives to consider include:

  • Provide additional taxable compensation to its employees, in an amount that is not tied to the cost of individual health insurance coverage and without any requirement that the employee actually purchase individual health insurance. Essentially, the additional compensation would simply be an increase to salary in recognition that the church is no longer providing health insurance coverage.
  • Implement a payroll practice under which the church agrees to forward after-tax contributions on behalf of employees directly to insurers to pay for individual health insurance coverage, so long as each of the following are satisfied:
  1. The contributions forwarded are deducted on an after-tax basis from the employee's salary;
  2. Employee participation is completely voluntary;
  3. The church does not pay any amount toward the cost of coverage;
  4. The church does not endorse the arrangement in any way;
  5. The church does not receive any cash or other consideration in exchange for collecting and forwarding the premiums; and
  6. The payroll deduction satisfies state wage payment laws.
  • Adopting a small group market plan through the SHOP Marketplace for small employers.

We will continue to do our best to keep you updated on any further guidance issued under the ACA.

*Note: If your church pays for or you are reimbursed for Churchwide Healthcare it's tax - free; If you are reimbursed for insurance purchased on exchange, privately or through spouse, it's taxable