Since the passage of the Small Business Healthcare Relief Act (SBHRA) as part of the 21st Century Cures Act, people enrolled in healthcare sharing ministries have wondered whether the new regulations affect them. Here is an overview of health care sharing ministries and how they fit into the new qualified small employer health reimbursement arrangement (QSEHRA), or small business HRA.
What is a health care sharing ministry?
Health care sharing ministries are faith-based 501(c)3 organizations designed to share medical costs among members. Medi-Share is an example of one such ministry. Members choose an affordable amount each month to contribute to the share plan. When members incur medical expenses, they submit a reimbursement claim to the program. If approved, the medical expense is paid by pulling funds from other participants’ accounts.
Health care sharing ministry programs have grown in the years since the Affordable Care Act (ACA) passed because its members are exempt from the individual mandate, meaning that enrollees will not be subject to the financial penalty associated with not carrying insurance.
Does participation in a health care sharing ministry count as MEC?
Because health care sharing ministries are not health insurance policies, they do not count as minimum essential coverage (MEC). The ACA requires that all Americans hold a minimum level of medical insurance and because a sharing ministry is only designed to reimburse certain medical expenses, it does not qualify as such.
Many types of insurance policies qualify as MEC, including most group health policies, all ACA Marketplace policies, and most comprehensive government-sponsored health programs, such as Medicare, CHIP, and most Medicaid policies.
Are health care sharing ministries compatible with the QSEHRA?
Yes, employees enrolled in health care sharing ministries can have eligible expenses reimbursed through the QSEHRA. Membership fees for health care sharing ministries are not eligible for reimbursement through a QSEHRA, and without minimum essential coverage, all reimbursements must be included in the employee’s gross income.
Health care sharing ministries are faith-based, not-for-profit organizations designed to help their members cover out-of-pocket medical expenses. Because these arrangements are reimbursement programs, rather than health insurance, they do not count as minimum essential coverage. As a result, employees participating in health care sharing ministries must declare reimbursements from the QSEHRA as part of their gross income.