Small Ministries May Qualify to Maintain Stand-Alone Health Reimbursement Arrangements

A recent change in the law will allow many small ministries to reimburse employees for individual insurance premiums and medical expenses on a tax-free basis.

The payments to the employee can be made under a small employer health reimbursement arrangement (HRA). Churches must have fewer than 50 full-time employees and cannot offer a group health plan to any of their employees.

The amount of the payments and reimbursements under the HRA cannot exceed $4,950 or $10,000 in the case of an arrangement that also provides for payments or reimbursements for family members of the employee). The limitation is subject to annual cost of living adjustments.

For more information on these new HRA provisions, see the Conner & Winters Client Alert. You can also subscribe to their benefits blog by going to and entering your e-mail address in the “subscribe to blog” box.

This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.


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