Participants in church plans or church related associations, organizations or colleges are not subject to COBRA. Below are definitions are details from Sec. 414. or the IRC (internal Revenue Code).
Sec. 414. Definitions and special rules
(e) Church plan
(1) In general
For purposes of this part, the term ``church plan'' means a plan
established and maintained (to the extent required in paragraph
(2)(B)) for its employees (or their beneficiaries) by a church or by
a convention or association of churches which is exempt from tax
under section 501.
(2) Certain plans excluded
The term ``church plan'' does not include a plan--
(A) which is established and maintained primarily for the
benefit of employees (or their beneficiaries) of such church or
convention or association of churches who are employed in
connection with one or more unrelated trades or businesses
(within the meaning of section 513); or
(B) if less than substantially all of the individuals
included in the plan are individuals described in paragraph (1)
or (3)(B) (or their beneficiaries).
(3) Definitions and other provisions
For purposes of this subsection--
(A) Treatment as church plan
A plan established and maintained for its employees (or
their beneficiaries) by a church or by a convention or
association of churches includes a plan maintained by an
organization, whether a civil law corporation or otherwise, the
principal purpose or function of which is the administration or
funding of a plan or program for the provision of retirement
benefits or welfare benefits, or both, for the employees of a
church or a convention or association of churches, if such
organization is controlled by or associated with a church or a
convention or association of churches.
(B) Employee defined
The term employee of a church or a convention or association
of churches shall include--
(i) a duly ordained, commissioned, or licensed minister
of a church in the exercise of his ministry, regardless of
the source of his compensation;
(ii) an employee of an organization, whether a civil law
corporation or otherwise, which is exempt from tax under
section 501 and which is controlled by or associated with a
church or a convention or association of churches; and
(iii) an individual described in subparagraph (E).
(C) Church treated as employer
A church or a convention or association of churches which is
exempt from tax under section 501 shall be deemed the employer
of any individual included as an employee under subparagraph
(B).
(D) Association with church
An organization, whether a civil law corporation or
otherwise, is associated with a church or a convention or
association of churches if it shares common religious bonds and
convictions with that church or convention or association of
churches.
(E) Special rule in case of separation from plan
If an employee who is included in a church plan separates
from the service of a church or a convention or association of
churches or an organization described in clause (ii) of
paragraph (3)(B), the church plan shall not fail to meet the
requirements of this subsection merely because the plan--
(i) retains the employee's accrued benefit or account
for the payment of benefits to the employee or his
beneficiaries pursuant to the terms of the plan; or
(ii) receives contributions on the employee's behalf
after the employee's separation from such service, but only
for a period of 5 years after such separation, unless the
employee is disabled (within the meaning of the disability
provisions of the church plan or, if there are no such
provisions in the church plan, within the meaning of section
72(m)(7)) at the time of such separation from service.
(4) Correction of failure to meet church plan requirements
(A) In general
If a plan established and maintained for its employees (or
their beneficiaries) by a church or by a convention or
association of churches which is exempt from tax under section
501 fails to meet one or more of the requirements of this
subsection and corrects its failure to meet such requirements
within the correction period, the plan shall be deemed to meet
the requirements of this subsection for the year in which the
correction was made and for all prior years.
(B) Failure to correct
If a correction is not made within the correction period,
the plan shall be deemed not to meet the requirements of this
subsection beginning with the date on which the earliest failure
to meet one or more of such requirements occurred.
(C) Correction period defined
The term ``correction period'' means--
(i) the period, ending 270 days after the date of
mailing by the Secretary of a notice of default with respect
to the plan's failure to meet one or more of the
requirements of this subsection;
(ii) any period set by a court of competent jurisdiction
after a final determination that the plan fails to meet such
requirements, or, if the court does not specify such period,
any reasonable period determined by the Secretary on the
basis of all the facts and circumstances, but in any event
not less than 270 days after the determination has become
final; or
(iii) any additional period which the Secretary
determines is reasonable or necessary for the correction of
the default,
whichever has the latest ending date.
(5) Special rules for chaplains and self-employed ministers
(A) Certain ministers may participate
For purposes of this part--
(i) In general
A duly ordained, commissioned, or licensed minister of a
church is described in paragraph (3)(B) if, in connection
with the exercise of their ministry, the minister--
(I) is a self-employed individual (within the
meaning of section 401(c)(1)(B), or
(II) is employed by an organization other than an
organization which is described in section 501(c)(3) and
with respect to which the minister shares common
religious bonds.
(ii) Treatment as employer and employee
For purposes of sections 403(b)(1)(A) and 404(a)(10), a
minister described in clause (i)(I) shall be treated as
employed by the minister's own employer which is an
organization described in section 501(c)(3) and exempt from
tax under section 501(a).
(B) Special rules for applying section 403(b) to self-employed
ministers
In the case of a minister described in subparagraph
(A)(i)(I)--
(i) the minister's includable compensation under section
403(b)(3) shall be determined by reference to the minister's
earned income (within the meaning of section 401(c)(2)) from
such ministry rather than the amount of compensation which
is received from an employer, and
(ii) the years (and portions of years) in which such
minister was a self-employed individual (within the meaning
of section 401(c)(1)(B)) with respect to such ministry shall
be included for purposes of section 403(b)(4).
(C) Effect on non-denominational plans
If a duly ordained, commissioned, or licensed minister of a
church in the exercise of his or her ministry participates in a
church plan (within the meaning of this section) and in the
exercise of such ministry is employed by an employer not
otherwise participating in such church plan, then such employer
may exclude such minister from being treated as an employee of
such employer for purposes of applying sections 401(a)(3),
401(a)(4), and 401(a)(5), as in effect on September 1, 1974, and
sections 401(a)(4), 401(a)(5), 401(a)(26), 401(k)(3), 401(m),
403(b)(1)(D) (including section 403(b)(12)), and 410 to any
stock bonus, pension, profit-sharing, or annuity plan (including
an annuity described in section 403(b) or a retirement income
account described in section 403(b)(9)). The Secretary shall
prescribe such regulations as may be necessary or appropriate to
carry out the purpose of, and prevent the abuse of, this
subparagraph.
(D) Compensation taken into account only once
If any compensation is taken into account in determining the
amount of any contributions made to, or benefits to be provided
under, any church plan, such compensation shall not also be
taken into account in determining the amount of any
contributions made to, or benefits to be provided under, any
other stock bonus, pension, profit-sharing, or annuity plan
which is not a church plan.
(E) Exclusion
In the case of a contribution to a church plan made on
behalf of a minister described in subparagraph (A)(i)(II), such
contribution shall not be included in the gross income of the
minister to the extent that such contribution would not be so
included if the minister was an employee of a church. Written by Craig J. Casey
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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