Legislation

Senators Introduce Amendment to Tax Reform Bill to Preserve Retirement Security for Church Employees

November 30, 2017 — The Church Alliance applauded Senators Susan Collins (R-ME) and Rob Portman (R-OH) for introducing an amendment to the Senate's tax reform bill (the Tax Cuts and Jobs Act) intended to preserve important retirement security provisions for clergy and church lay workers that would be repealed by the bill being debated in the Senate. Read the entire press release.

 


 

Legislation Introduced to Preserve Retirement Security for Church Employees

May 3, 2017 — The Church Alliance applauded Senators Ben Cardin (D-MD), Mike Crapo (R-ID), and Pat Roberts (R-KS) and Representatives Peter Roskam (R-IL) and Ron Kind (D-WI) on the introduction of bipartisan, bicameral legislation to ensure that all church-affiliated organizations have access to church retirement income accounts known as Internal Revenue Code § 403(b)(9) plans. Read the entire press release.

The full text of S. 674 can be found here.

 


 

Church Alliance Joins Alliance to Fight The 40

On July 20, 2016, the Church Alliance became a member of the Alliance to Fight the 40, which is a broad-based coalition seeking to repeal the 40% “Cadillac Tax” on the cost of employer-sponsored health coverage that exceeds certain thresholds.

“With all of our members potentially affected by the ‘Cadillac Tax,’ we look forward to working with Fight the 40 to repeal this onerous tax and protect the health benefit plans operated by churches, religious institutions and affiliated organizations,” said Barbara Boigegrain, Chair of the Church Alliance.

The Alliance to Fight the 40 now has 43 member organizations that have joined the group, including public and private sector employer organizations, patient advocates, businesses, unions, and other stakeholders that support employer-sponsored health coverage. The Alliance views this coverage as the backbone of our health care system, as it covers over 175 million Americans across the United States. The Alliance to Fight the 40 seeks to repeal the 40% Cadillac Tax to ensure that employer-sponsored coverage remains an effective and affordable option for working Americans and their families.

 


 

Church Alliance Submits Statement to House Ways and Means Healthcare Subcommittee

On May 17, 2016, the U.S. House of Representatives Committee on Ways and Means Subcommittee on Health held a hearing on “Tax-Related Proposals to Improve Health Care.” As a follow-up to the hearing, stakeholders such as the Church Alliance were invited to submit statements for the record to the subcommittee. The Church Alliance submitted to the health subcommittee the following Statement for the Record, explaining the Church Alliance’s position on proposals that would improve health care for the church health plans community. Specifically, the statement explains the urgent need for Congress to address the treatment of church health plans under the Patient Protection and Affordable Care Act.

 


 

Church Alliance Thanks Congressional Champions of Church Plan Clarification Act

Church Plan Clarification Act of 2015 (Enacted as part of the 2016 Consolidated Appropriations Act)

The Church Plan Clarification Act (CPCA) was enacted on December 18, 2015 as part of the 2016 Consolidated Appropriations Act – a $1.8 trillion dollar year-end spending and tax package that Congress passed and the President signed. Among other things, the year-end package also delayed the Affordable Care Act (ACA)’s “Cadillac” Plan Tax (the excise tax on high-cost health plans) by two years to 2020.

The CPCA, authored by the Church Alliance, addresses five issues that are critical to church benefit plans: the “controlled group” rules, section 415 limits on grandfathered defined benefit plans, automatic enrollment in church defined contribution plans, transfers between 403(b) and 401(a) plans, and investing in collective trusts. Under the CPCA’s new controlled group provisions, the IRS is prevented from aggregating certain church plans together for purposes of the non-discrimination rules, which prevent highly compensated participants from receiving disproportionate benefits under the plan, and provides flexibility for church employers in determining which other church employers are in its controlled group of employers. This may help churches ascertain the applicability of the Affordable Care Act’s large employer shared responsibility rule, for example. Under the new section 415 provisions, certain grandfathered church defined-benefit plans will be subject only to the defined benefit limitations of code section 415(b), and no longer subject to the defined contribution limitations of code section 415(c). Under the automatic enrollment provisions, church retirement plans are now allowed to offer auto-enrollment in all fifty states despite state wage withholding laws, similar to plans covered by ERISA. Under the new plan-to-plan transfer provisions, it will be easier for easier for church plans to engage in certain plan-to-plan transfers and mergers between 401(a) and 403(b) plans. Lastly, the CPCA adds a provision that permits church plan investment boards to invest in a group trust described in IRS Revenue Ruling 81-100 (“collective trusts”). These provisions generally are effective on or after the date of enactment.

The Church Alliance worked diligently during the 114th Congress and the previous two Congresses to push this bill to enactment. This accomplishment is the result of the strong support from the members of the Church Alliance and numerous individuals within the member denominations. The text of the entire Consolidated Appropriations Act can be viewed here (the CPCA provisions are contained in Section 336 beginning on page 868. The text of the Cadillac plan tax delay is on page 796).

 


 

Public Law 112-142 (July 9, 2012) (introduced as H.R. 33)

The official summary from the Congressional Research Service states:

7/9/2012--Public Law.
Church Plan Investment Clarification Act—Amends the Securities Act of 1933 with respect to when certain securities issued in connection with retirement income accounts available only to certain kinds of church plans are treated as exempted from registration and disclosure requirements under such Act (exempted securities).

Considers as an exempted security a certain kind of retirement income account (available only to church plans), to the extent that the interest or participation in a single trust fund or collective trust fund (e.g., a “stable value fund”) is issued to:

  1. a church, a convention or association of churches, or a specified kind of organization (including a church pension board established to maintain employee benefit programs) which establishes or maintains the retirement income account; or
  2. a trust established by any such entity in connection with the retirement income account.

Revises a further such exclusion from exempted security treatment of plans whose participants may include persons (in particular clergymen) who may be considered self-employed for certain tax purposes.

Allows exempted security treatment of such plans.

(In effect, an exemption from registration and related requirements is granted to collective trust funds that are invested in by kinds of church plans currently excluded from making such investments.)

 


 

Church Health Plan Act of 2013 (S. 1164)

The Church Health Plan Act of 2013 was introduced into the Senate on June 13, 2013 as S. 1164, by Senator Mark Pryor (D-AR) and Senator Chris Coons (D-DE). The bill would make necessary technical corrections to the Patient Protection and Affordable Care Act (PPACA) to preserve church health plans. The bill would extend small business tax credits and individual premium tax credits to churches and their clergy and lay employees in self-insured multiple employer church health plans that provide benefits equivalent to PPACA qualified health plans. Senator Pryor’s press release about the Church Health Plan Act can be found here. Although this bill did not pass in the 113th Congress and has now expired, a similar bill is expected to be introduced in the 114th Congress sometime in 2015.