Health Insurance for Synagogue Employees: Options and an Opportunity
A few years ago, within a six-month time span, both my wife Linda and our teenage daughter Dani had appendectomies. I was a little fearful that there might be something in the water in our house and my turn with the surgeon would soon follow.
What really was an eye opening experience was reviewing the hospital and surgeon’s bills. For the surgery and a three-day hospital stay, the charges in each instance were more than $25,000. I was certainly very thankful for the health insurance coverage we have through the Board of Education where Linda works.
The current presidential election, through the Patient Protection and Affordable Care Act (“PPACA”) has once again put the health care debate among the key issues being debated. For many synagogues, finding affordable health insurance coverage for employees remains an on-going challenge. I thought I would list a few options that you might explore in your own community as well as nationally.
Synagogues in Columbus, OH have been part of an organization of Jewish not-for-profits and synagogues that was created for the specific purpose of providing health insurance coverage. Through the Federal Church Plan Parity and Entanglement Prevention Act of 1999 that was signed into law by President Clinton, groups of employers within faith-based communities can apply for insurance as a single entity. The Columbus Jewish Federation has been the convener and administrator of this effort.
It would certainly be conceivable for a group of synagogues and churches in the same geographic vicinity to create a similar association for the purposes of providing health insurance to its synagogue and church employees.
Oftentimes, your local chamber of commerce might offer health insurance to the employees of its members. Synagogues have joined their local Chamber for this specific purpose. You can look at the health insurance offerings of the Orange County Chamber of Commerce in New York State and the North Central Massachusetts Chamber of Commerce to give you a sense of such plans. Of course you should look at the website of the local Chamber of Commerce in your community.
For synagogue employees who are age 50 or older, AARP also becomes a viable option.
As the program and fiscal years for most synagogues are coming to a close, it is important to remind you about Health Care Reform Tax Credits. The PPACA established a Small Business Healthcare Tax Credit as an incentive for small employers – including houses of worship – to provide health insurance coverage to their employees. Qualified synagogues – those with 25 or fewer “full time equivalent” employees and average wages less than $50,000 – may be eligible for the Tax Credit if they contribute a uniform percentage of at least 50% towards the cost of their employees’ health insurance.
For synagogues as well as all tax exempt organizations, the tax credit can be up to 25% of premiums paid and will take the form of a refundable credit against the amounts the synagogue is required to withhold from its employees’ wages for Federal Income and Medicare Taxes, plus the employer share of Medicare Taxes (the credit is therefore also limited to these amounts).
You have to fill out a couple of tax forms for the IRS, IRS Form 8941 and IRS Form 990-T. Forms are due to the IRS on the 15th day of the fifth month following the close of your synagogue’s fiscal year. For synagogues whose fiscal year ends on June 30th, the filing date is November 15th.
Filing anything with the IRS is certainly new to most synagogues. You don’t have to share complete financial information with the IRS. Just the financial information related to total salaries and medical insurance costs.
You should of course check with your accountant about this. This is the second year that small businesses –including synagogues – can take advantage of this credit. Accountants working with small businesses should now be familiar with the regulations and filing requirements.
What does your synagogue do in terms of health insurance for its employees? Have you taken advantage of the Health Care Tax Credit? Share with others your experience and knowledge by writing on this blog.