Health Care Legislation May Help Your Ministry’s Budget

by Jac La Tour, ECCU Communications Manager
(Originally published as a post within ECCU’s former e-publication, The Buzz.)

Raise your hand if you have an opinion about the health care legislation recently passed by Congress. Everybody seems to, even though most of us have never read the massive bill. Did you know, for example, that it’s called the Patient Protection and Affordable Care Act? Me either.

We recently learned something about this bill that, while not likely to change your opinion of it, may be of benefit to your ministry. It has a feature called the Small Business Health Care Tax Credit that could qualify your ministry for a credit on your 2010 tax return.

An Internal Revenue Service (IRS) news release says the intent of this credit is to “encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.” A page on the IRS website has all the details about this tax credit, which applies to both small businesses and tax-exempt organizations. A qualifying employer must meet the following criteria:

  • Cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
  • Have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
  • Pay average annual wages below $50,000.

The maximum possible credit for ministries is 25 percent of health insurance premiums paid in 2010. While small businesses can claim the credit as part of their general business credit, the IRS has not yet made clear how tax-exempt employers like ministries will be able to claim it.

And of course, even if your ministry does qualify for this credit, you’ll have to answer the question of whether you want to take advantage of it. That’ll be a discussion for your leadership team.

I thought about checking out the rest of the health care legislation to look for more potential benefits for ministries, but one online report says it’s nearly 2,000 pages and 400,000 words long. Fortunately, the Evangelical Council for Accountability (ECFA) beat me to it. Turns out there’s a supplement to the original legislation that you’ll want to know about. Check out this ECFA link for details.

So I’m not going to read the Patient Protection and Affordable Care Act.

But I still have an opinion about it.

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