Healthcare costs can be a significant financial burden for many families and organizations. As traditional health insurance plans grow more expensive and complex, alternative options like healthcare sharing ministries have gained traction. These organizations present a different approach to managing medical expenses—often at a lower cost—by emphasizing community and shared values. Understanding how they operate, along with their advantages and limitations, is essential before considering membership.
While religious groups initiated most health sharing ministries as benefits for their congregations, some, like Medi-Share, now offer open enrollment to the broader public. These entities are generally nonprofit organizations that do not cover procedures conflicting with their spiritual or religious principles. Consequently, their monthly costs tend to be more affordable than conventional insurance policies. However, it is crucial to grasp their functioning and restrictions to determine if they are suitable for your needs.
In this comprehensive overview, we will explore what healthcare sharing ministries are, examine their benefits and disadvantages, and review alternative health plans that can help organizations reduce healthcare expenses for their members or employees.
> Key Takeaways:
- Healthcare sharing ministries represent a cost-effective alternative to standard health insurance plans.
- They operate as nonprofit organizations with typically lower monthly contributions.
- Members contribute to collective funds and can request assistance for eligible medical costs.
What Are Healthcare Sharing Ministries?
A healthcare sharing ministry is a type of community-based health cost-sharing plan, often categorized as a private healthcare system (PHCS). Originating in the 1990s, these programs are primarily faith-centered and structured as 501(c)3 nonprofit organizations.
Participants generally share similar religious beliefs and values, which form the basis of their mutual support. Most established organizations in this space are founded on Christian principles, and membership often requires adherence to specific lifestyle and faith commitments.
Unlike traditional health insurance purchased through federal or state marketplaces, joining a healthcare sharing ministry does not depend on open enrollment periods or qualifying life events. Members can typically join at any time, providing flexibility for those seeking an alternative coverage option.
Some of the most recognized healthcare sharing organizations include:
- Christian Healthcare Ministries
- Zion HealthShare
- OneShare Health
- Solidarity HealthShare
- Medi-Share
- Samaritan Ministries
- Liberty HealthShare
- United Refuah HealthShare
- MCS Medical Cost Sharing
- Altrua HealthShare
- Freedom HealthShare
- Trinity HealthShare Inc
How Do Healthcare Sharing Ministries Operate?
Members of these ministries contribute a predetermined monthly amount into a communal fund, which is used to assist fellow members with eligible medical expenses. When a member incurs medical costs, they submit a request for assistance. Upon approval—either through an administrative review or a committee decision—other members’ pooled contributions are used to pay the healthcare provider directly.
Much like traditional insurance, most plans set a minimum out-of-pocket amount that must be met before assistance is provided. This deductible can range from a few hundred to several thousand dollars, depending on the plan.
Participants often belong to a preferred provider organization (PPO), which grants access to negotiated rates with in-network providers, reducing costs. Visiting out-of-network doctors or facilities may result in higher charges or full payment by the member.
Because many of these ministries are rooted in Christian doctrine, members are expected to comply with certain spiritual and behavioral standards—such as abstaining from tobacco, illegal drugs, and procedures that conflict with their faith. This religious requirement influences what is covered and what is not, often excluding procedures deemed inconsistent with Christian beliefs.
Advantages and Disadvantages of Healthcare Sharing Ministries
Like any healthcare option, these ministries come with specific strengths and limitations. We will review the main pros and cons to help you make an informed decision.
Benefits of Healthcare Sharing Ministries
While affordability is a primary appeal, many organizations offer additional perks such as discounts on dental and vision care, access to telehealth services, and even coverage for certain non-medical expenses like adoption or funeral costs.
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Notable benefits include:
- Generally lower monthly costs compared to traditional insurance premiums, making them attractive for individuals and families seeking budget-friendly options.
- Continuity of membership, regardless of medical conditions, unlike some insurance plans that may restrict coverage based on health status.
- Flexibility in coverage, including qualifying expenses like adoption and end-of-life arrangements.
- Location and employment status typically do not influence membership eligibility.
- An annual audit by independent accounting firms helps ensure financial transparency and stability.
- They offer an alternative pathway to health coverage outside of the ACA Marketplace.
- The community aspect fosters personal connections, with members supporting each other through notes of encouragement and shared values.
Drawbacks and Limitations
Despite their advantages, healthcare sharing ministries have notable restrictions that potential members must understand.
Key disadvantages include:
- Many are exempt from regulation by state insurance departments, with at least 30 states explicitly excluding these plans from oversight. This can limit consumer protections and dispute resolution options.
- As per IRS guidance (see IRS Letter 2016-0051), these plans do not qualify as minimum essential coverage (MEC) under the ACA. Consequently, they cannot be offered as an alternative to employer-sponsored insurance for large businesses or within health reimbursement arrangements.
- Coverage for pre-existing conditions, preventive services, and certain treatments is often limited or excluded, which could be problematic for members with ongoing medical needs.
- Additional costs may apply for members with specific pre-existing conditions, such as diabetes.
- Many plans impose annual or lifetime benefit caps, restricting the total amount payable.
- As faith-based organizations, they may require members to attend religious services regularly, abstain from tobacco and illegal drugs, and attest to a statement of faith—criteria that may not suit everyone.
- Since these plans are not compliant with ACA regulations and do not provide MEC, members lose eligibility for special enrollment periods if they lose coverage elsewhere.
Can You Use an HRA with a Healthcare Sharing Ministry?
Health Reimbursement Arrangements (HRAs), such as QSEHRA or ICHRA, typically cannot reimburse membership fees paid to healthcare sharing ministries due to IRS rules (see 26 U.S. Code § 213). Because these ministries are not insurance and do not qualify as MEC, their membership dues are generally ineligible for tax-free reimbursement.
However, a recent proposal in 2020 suggested allowing organizations to reimburse employees for healthcare sharing fees using MEC, but this change has not been enacted.
Employees can still seek reimbursement for other qualified medical expenses, such as prescriptions or counseling, through their HRAs. To supplement their coverage, employees might consider purchasing a catastrophic or bronze plan alongside a sharing ministry to ensure MEC compliance.
If you’re exploring options for a flexible, cost-effective healthcare solution for your team, an HRA can offer broader coverage and more control over healthcare spending, as highlighted in 7 things you need to pay attention when developing a healthcare application.
Can You Reimburse Healthcare Sharing Memberships with a Health Stipend?
While HRAs are generally incompatible with sharing ministry fees, employers may choose to reimburse these memberships through a health stipend. Unlike HRAs, stipends are considered taxable income and must be reported on W-2 forms.
A health stipend provides a straightforward way for employers to financially support employees’ healthcare-related expenses, including membership dues, insurance premiums, and out-of-pocket costs like prescriptions or dental care. Reimbursements are typically processed through payroll, and proof of purchase may be requested, especially for membership fees to healthcare sharing organizations, which are not classified as formal health plans under IRS regulations.
This approach offers flexibility but at the expense of tax advantages, making it suitable for employers seeking simple reimbursement methods without the regulatory complexities of HRAs.
Final Thoughts
While healthcare sharing ministries attract many due to their affordability and community-oriented approach, it’s important to carefully review their membership requirements and limitations. Not adhering to their specific rules could lead to denial of coverage or termination of membership.
For organizations seeking a more flexible, tax-advantaged alternative, implementing an HRA can provide comprehensive coverage options with fewer restrictions. Tools like PeopleKeep’s HRA administration software streamline the setup and management process, making it easier to implement these benefits effectively.
Participation in healthcare sharing plans remains popular—over 1.7 million Americans are involved—yet it’s essential to weigh all pros and cons before making a commitment. Carefully consider your health needs, faith commitments, and the regulatory environment to choose the option best suited for your circumstances.