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IRS Offers Tips For Church Health Plans

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The Internal Revenue Service has released guidance for religious congregation medical insurance programs.

The final regulations, “Exception to the HIPAA Nondiscrimination Requirements for Certain Grandfathered Church Plans,” appear today in the Federal Register.

The final regulations provide advice about how to apply Section 9802(c) of the Internal Revenue Code.

The section, created by the Taxpayer Relief Act of 1997, eases the Health Insurance Portability and Accountability Act health plan fairness rules that otherwise would apply to church health plans that already were in place in 1997.

If, for example, a religious organization has one health plan for affiliated churches with more than 10 employees and a second individually underwritten plan for churches with 10 or fewer employees, and the individually underwritten plan has been in effect since July 15, 1997, the fact that the second plan offers individually underwritten coverage would not cause it to fail to meet nondiscrimination requirements, officials write in the final regulations.

The regulations take effect Feb. 12, 2007, for plan years beginning on or after July 1, 2007, according to IRS officials.

A copy of the church health plan guidance is on the Web at Document Link