Healthcare sharing ministries are a healthcare alternative that have exploded since the Affordable Care Act (ACA) came into effect. Although they began in the 1990s, many people remain unfamiliar with the benefit. While the majority of healthcare sharing ministries were originally created for organizations as a benefit for their own members, a select few offer open membership, Medishare being the most popular.
Because these organizations are not-for-profit and don’t fund the cost of certain medical procedures that act against their beliefs, costs are generally lower than other health insurance options. But just how do healthcare sharing ministries work and who is eligible?
Before entering into this arrangement, it’s important to understand the organization’s rules, how they function, and the benefits and challenges.
In this article, we’ll define what a healthcare sharing ministry is, the pros and cons of this benefit, and other alternative health plan options such as health reimbursement arrangements (HRAs).
In a rush? Skip to a section below!
- What is a healthcare sharing ministry?
- How do healthcare sharing ministries work?
- Pros of healthcare sharing ministries
- Cons of healthcare sharing ministries
- Can you use an HRA with a Medishare?
What is a healthcare sharing ministry?
A healthcare sharing ministry is a medical sharing plan or private healthcare system (PHCS) that is a faith-based 501(c)3 not-for-profit organization.
Members share similar beliefs and values and use guidelines as the foundation for their medical expense distributions. The vast majority of the known and active health care sharing organizations are founded on religious principles.
Unlike health insurance, you can sign up for a health sharing ministry at any time with no need to wait for an open enrollment period or a major life event.
Some of the larger healthcare sharing ministries are:
- Christian Healthcare Ministries
- Medi-Share, Samaritan Ministries
- Liberty HealthShare
- United Refuah HealthShare
- MCS Medical Cost Sharing
- Altrua HealthShare
- Freedom HealthShare
- Trinity HealthShare
How do healthcare sharing ministries work?
Members of healthcare sharing ministries contribute a fixed monthly dollar amount to their savings account. When a member of the ministry community is ill and needs help paying their medical expenses, the person submits a request for the amount needed to cover the bill. If approved, either by a person appointed to the position or by committee vote, the request is paid directly to the healthcare provider with funds from other members’ savings accounts.
As with traditional health insurance policies, there is usually a set amount that each family or individual has to pay before submitting requests to the program for assistance. This amount can range from about $500 to $10,000.
Members are part of a preferred provider organization (PPO), which means they receive pre-negotiated rates when they use providers in that network. If a member uses a non-PPO physician or facility, they may have to pay out-of-network prices or even cover the entire bill.
Many refer to healthcare sharing ministries as Christian health insurance because members need to comply with the imposed rules of Christianity. This typically means there are no payouts for procedures that are against Christian beliefs.
Pros of healthcare sharing ministries
While low costs are certainly a perk of healthcare sharing ministries, some of these organizations have additional membership bonuses such as dental and vision discounts, disability sharing, and free telehealth—offering members the ability to speak to a licensed physician via phone or video at no extra charge.
More advantages of healthcare sharing ministries include the following:
- Healthcare sharing ministries are cost-effective because each family contributes a specific monthly dollar amount they choose based on program options.
- Membership can’t be terminated for developing a medical condition.
- Healthcare sharing ministries don’t impose annual or lifetime limits.
- Qualified adoption and funeral expenses can be covered.
- Membership isn’t affected by where you live or employment status.
- Healthcare sharing ministries can be audited annually by an independent accounting firm to ensure financial stability.
- Healthcare sharing ministries provide a viable option for those who are looking for an alternative to shopping on the ACA Marketplace.
- Members of these ministries are able to encourage one another through personal notes of encouragement, which in turn can foster a sense of community and family between each other.
Cons of healthcare sharing ministries
In the case of all insurance programs, there are some disadvantages to Medishare organizations as well. It’s important for members to know about the limitations so those considering the benefit are aware of the entire process and can make the right decision for their health and family.
Disadvantages of healthcare sharing ministries include the following:
- Many regulations consider healthcare sharing insurance, so consumers have little or no legal protection if a claim is not paid, coverage is denied, or the ministry goes bankrupt.
- Treasury letter 2016-0051 confirms that healthcare sharing ministries don’t qualify as minimum essential coverage (MEC) the ACA’s employer mandate.
- There are certain restrictions and payment caps relating to pre-existing conditions.
- Certain pre-existing conditions, such as diabetes, may require a member to pay an additional monthly amount along with standard membership fees.
- Because healthcare sharing ministries are faith-based organizations, they can have specific rules associated with membership.
- For example, members might be required to attend church regularly, abstain from tobacco and illegal drugs, and attest to a specific statement of faith.
Can you use an HRA with a Medishare?
Because of IRS guidelines, healthcare sharing ministries membership fees can’t be reimbursed under a health reimbursement arrangement, such as the qualified small employer HRA (QSEHRA). This is due to U.S. Code 213 which determines the types of expenses and health insurance premiums that can be reimbursed through an HRA.
Healthcare sharing ministry programs aren’t offered by an insurance company, making the benefit technically not considered insurance. Therefore, membership fees or donations aren’t eligible for reimbursement per the IRS.
However, employees may still be eligible to receive reimbursements on other types of qualified medical expenses. For example, insurance isn’t required to participate in a QSEHRA. Employees can use their HRA allowance to pay for out-of-pocket expenses, including prescription drugs, counseling, over-the-counter medicine, and more.
If you’re comparing between the two benefits and searching for a comprehensive healthcare alternative with more flexibility and less limitations for your employees, an HRA might be the way to go. Your employees will have better control over their healthcare decisions and provide you a tax-free and budget-friendly alternative to traditional health insurance for your company.
It’s understandable to be cautious about healthcare sharing if you’re not familiar with it. However, it remains fairly popular with more than 1.5 million Americans participating in the benefit. Healthcare sharing can provide an alternative to traditional health insurance, but it does come with certain restrictions.
You should review Medishare membership requirements to see if the terms to join are agreeable to you. Failure to adhere to these terms could result in a denied application or membership cancellation.
If you think that a tax-advantaged HRA benefit will be more flexible and comprehensive for you and your employees’ needs, PeopleKeep can help you get started! Schedule a call with a personalized benefits advisor at PeopleKeep to learn more.
This article was originally published on August 18, 2020. It was last updated November 19, 2021.