|
Dear Friends-
This email pertains to certain parts of pastor's terms of call and reimbursement of medical expenses. If you are not the person responsible for this, please share this information with the appropriate parties within your congregation, including Treasurers/Bookkeepers.
For many years, the Pittsburgh Presbytery Minimum Terms of Call have included the following provision: “Provide payment for or reimbursement of medical expenses, including deductibles or copays, vision, and dental costs up to 2% of effective salary through a reimbursable account or a qualified Health Savings Account.” One of the goals of using a reimbursable account for medical expenses was the tax benefits. We recently learned that using a reimbursable account, while legal, makes those reimbursements taxable.
In light of this, the Commission on Ministry recommends that employers suspend direct medical reimbursement for pastors and employees. We are currently in conversation with the Board of Pensions as well as tax professionals regarding potential options for those who wish to continue to be reimbursed for medical expenses in a tax-sheltered manner. We expect to have that information ready to share in the coming weeks and will continue communicating with you as we learn more: this is the first but not the final communication you will receive on this topic. I also acknowledge that this may bring up more questions than answers, and I had hoped to explain the issue and offer you an immediate solution, all in one communication. However, when it comes to tax law and any guidance we provide, we must be extra diligent to ensure we share accurate information.
Before you read any further, there are two points I must be abundantly clear on:
• I am referring only to situations where a pastor/employee turns in medical bills (co-pays, deductibles, etc.) and is directly reimbursed by the employer. Other forms of reimbursement, including expenses and continuing education, are not impacted and should continue without delay.
• Our information and recommendations are based on information from the Board of Pensions and a well-regarded clergy tax specialist. That being said, you are encouraged to consult a tax professional for further guidance if you have questions regarding your specific situation.
To recap: We recommend churches stop directly reimbursing medical expenses to pastors/employees immediately. We will provide further information as well as an avenue and forum for questions in the coming days and weeks.
In Christ,
| 
