If you’re experiencing some sticker shock with your 2021 health insurance increases, you’re not alone. Many people are searching for alternative healthcare solutions, including health reimbursement arrangements (HRAs) and healthcare sharing ministries.
Healthcare sharing ministries are cost-sharing programs or private healthcare systems (PHCS) that are set up as a faith-based 501(c)3 not-for-profit organization. Members share religious beliefs and values and use these as a cornerstone for their medical expense distributions.
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 dollar amount each month to their own savings account. When a member of the 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 by using 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 shoulder the entire bill.
Pros of healthcare sharing ministries
- Healthcare sharing ministries are cost-effective because each family contributes a monthly specific dollar amount they choose based on program options.
- Membership cannot be terminated for developing a medical condition.
- Healthcare sharing ministries do not impose annual or lifetime limits.
- Qualified adoption and funeral expenses can be covered.
- Membership is not affected by the state of residence 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.
Cons of healthcare sharing ministries
- Many states do not 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.
- 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.
- Healthcare sharing ministries cannot be used with Health Savings Accounts (HSAs) or reimbursement plans, such as the qualified small employer HRA (QSEHRA).
Changes may be coming
Newly proposed rules called Certain Medical Care Arrangements, if passed, could treat membership costs for healthcare sharing ministries the same as health insurance premiums for taxation. This would greatly expand the value and reach of HRAs, potentially reducing the tax burden of medical expenses for over a million people. We are watching the progress of this issue closely and are developing solutions that will make our award-winning HRA solutions readily available to healthcare sharing ministries once the rule is in effect.
Healthcare sharing can provide an alternative to traditional health insurance, but it does come with certain restrictions. If you are looking into healthcare sharing, read through the rules carefully to make sure you comply.
Editor's note: This post was updated August, 2020 to highlight newly proposed rules that would make contributions to healthcare sharing ministry memberships tax deductible, similarly to insurance premiums.
What questions do you have about health care sharing ministries or HRAs? Let us know in the comments below.