Benefits for a Small Church

[Delta76]

I was approached by a small church asking about health benefit options for their 7 employees. They may just bonus $150 per employee each month and be done with it. If they do this, I assume we would set up a 125 or 105 plan just like any other business entity? Are there any other special rules I should be aware of for non-profits?

 

[ABC]

Check with your state laws.

In my state they would not be allowed to set up a section 125 for the $150 for each employee. So I think the $150 would be tax as income.

Why not sell them individual plans and set up a list bill?

There still might be some tax issues with that approach.

 

[JustinUpright]

Can't you set up a 125 and have the employer contribute the $150 to the plan. The employer will get a tax deduction the employee gets $150 towards health care, and the agent has good participation because it is $150 to be used on the health insurance your offering. I had one set up like that. The company funded portion was used for STD and The Employees purchased accident plans pre-taxed.

 

[kwimberl]

Churches are typically non-profit and the rules can be different. I do not have expertise in this area, but know not to assume it to be like any other business. For example, a church cannot do a 401K plan (they do a 403B).