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The COBRA Health Plan: Does Your Church Need to Provide Group Health Coverage During COVID-19?

The short answer is no.


The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees (and their families) who lose their sponsored health plan benefits the right to continue group health coverage for around 18 months during specific circumstances (e.g., job loss, reduction of working hours, and certain life events).


Now most employer-sponsored group health plans must fall in line with the COBRA’s continuous coverage requirements. However, church plans are one of the few exceptions to the rule. To make sure we’re all on the same page, the definition of a church plan is any employee benefit plan established or maintained by a church or by a church association/convention that:

  • is exempt from tax under section 501 of the Internal Revenue Code and

  • has chosen not to have certain tax qualification requirements apply to it under Section 410(d).

Evidently, it will take some work to figure out whether the church plan exemption applies to your church or association. It often involves a detailed analysis of the organization’s activities and the closeness of its religious affiliation. For instance, some religiously-affiliated organizations like schools and hospitals are not “churches” per se, but may qualify for the church exemption if they are closely controlled by or associated with a church or religious denomination.


Providing benefits like continuous group health coverage during global crises can be a blessing or burden depending which end of the employment spectrum you belong to. As an employer, you want to be sure to check with your tax and legal advisors whether your religious organization falls under the exemption. Consult with the experts at Landmark Tax today and leave the hard work in their capable hands, while you continue to focus on benefiting your community as well as your organization amidst this time of uncertainty.


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