January 13, 2017
New legislation may once again allow tax savings for medical premiums

Greetings from the BBT Alert desk --

The important  news for employees of Church of the Brethren congregations, districts, and camps is that there is a new law that will allow more employers to pay or reimburse employees' individual health insurance premiums. By signing into law the 21st Century Cures Act on Dec. 13, 2016, Congress and President Obama  made it possible for small business employers with fewer than 50 full-time equivalent employees that don't offer a group health plan to use "Qualified Small Employer Health Reimbursement Arrangements" to reimburse employees who buy their own insurance. This law allows qualified employers to offer the new arrangement, also known as a QSEHRA, to their employees, effective Jan. 1, 2017. 
The Internal Revenue Service had not previously allowed such an arrangement under the ACA. According to Robb Mandelbaum's Dec. 14 article in Forbes titled, " New Law Eases Small Business Health Care Burden (But May Make Repealing ObamaCare Harder)," the new legislation allows small businesses to "... reimburse employees for purchasing their own health insurance as if it were directly paying the premiums on a group health policy: The employee won't have to pay taxes on the company's premium contribution, and the company won't owe payroll taxes on it, either."

There are stipulations, of course, so please read the fine print. The following links will take you to helpful information -- the referenced Forbes article text; a related overview article on the new changes from the Dec. 27 Benefits Law Update, authored by BBT's legal counsel; and a full legal summary of the changes, also provided by BBT's legal counsel.
BBT is providing this alert for informational purposes only; it may not be construed as professional advice or counsel. We do believe you should know about it because it could impact you, but encourage you to consult with the attorney or accountant who advises your church or small organization on tax matters. BBT is not able to answer specific questions pertaining to this new law. The details in this alert are based on the current situation and could be subject to change in the future.

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Church of the Brethren Benefit Trust | 800-746-1505 | insurance@cobbt.org
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