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Is Faith-Based Healthcare Coverage Accepted Under the ACA?

Is Faith-Based Healthcare Coverage Accepted Under the ACA?

Posted Oct 10, 2016 by Jenifer Dorsey

Learn About the Obamacare Exemption Half a Million People are Taking Advantage of in 2016

In record numbers, a portion of the population is foregoing Obamacare plans for a type of healthcare coverage that is not state-regulated (it’s not even considered insurance) and generally allows them to avoid the ACA tax penalty.[1] Enrollment in faith-based healthcare ministries, also known as healthcare sharing ministries, has more than doubled since the Affordable Care Act passed in 2010 – jumping from about 200,000 to 500,000 members nationwide.[2]

What is a healthcare sharing ministry? Health care sharing ministries are “non-insurance entities in which members “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs.”[3]

As of September 2016, HCSMs share more than $670 million per year for one another’s health care costs and[4]:

  • Receive no funding or grants from government sources
  • Are not insurance companies – HCSMs do not assume any risk or guarantee the payment of any medical bill; 30 states have explicitly recognized this and specifically exempt HCSMs from their insurance codes
  • Serve more than 625,000 people, with participating households in all 50 states
  • Strive to be accessible to participants regardless of their income, because traditionally shares are a fraction of the cost of insurance rates

Officials explained to The Wall Street Journal in 2016 that they are not offering insurance, do not guarantee claims will be paid, and do not need to be regulated; however, they are well managed with third-party audits and a “sterling” history of sharing members’ claims.[5]

Despite the lack of regulation and guaranteed claims payment, at a cost that can be 30 percent less than private health insurance, with monthly rates of about $75 for an individual under age 30 and around $500 for a family, faith-based health plans are an attractive option for those who qualify.[6]

People are looking for financial relief in the form of cheaper health insurance

Let’s take a step back and look at why people may be flocking to Christian healthcare ministries in record numbers.

While personal beliefs and political philosophies may take some credit, first and foremost, it would seem to come down to cost. Christian Healthcare Ministries, one provider of faith-based healthcare coverage, markets itself as “an affordable, faith-based solution for Christians to the problems of rising healthcare costs and expensive health insurance policies.”

If many Americans feel like their healthcare costs keep going up, it’s because they are.

A 2014 Brookings Institute study found that “enrollment-weighted premiums in the individual health insurance market increased by 24.4 percent beyond what they would have had they simply followed… trends,” and a S&P Global Institute study found that average individual market medical costs increased an estimated 69 percent from 2013 to 2015.[7] As of Oct. 7, 2016, ACASignups.net reported that the overall national average approved rate increase for 2017 Obamacare plans was 24 to 25 percent.[8]

Needless to say, many in the middle-class have been feeling the squeeze when it comes to health insurance premiums — and they will continue to do so. Many argue that this is the population for whom Obamacare plans are too expensive, given that they pay most if not all of their health insurance premiums without financial assistance.[9]

A recent HHS report showed that of the 11.1 million currently enrolled in exchange-based 2016 health insurance plans, approximately 9.4 million qualified for financial assistance and 1.7 million did not.[10] An estimated 6.9 million currently buy individual health insurance plans off-exchange, according to the same report. Of those individuals, 2.5 million were estimated to be eligible for tax credits. That means approximately 8.6 million people pay the full premium amount for their health insurance plans.

Members of a healthcare sharing ministry are exempt from the ACA’s individual mandate

The Affordable Care Act allows an exemption from the individual shared responsibility provision for members of a health care sharing ministry.[11] A listing at IRS.gov defines this as follows:

You are a member of a health care sharing ministry, which is an organization described in section 501©(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.*

This exemption must be claimed on an individual’s tax return. Ministries that are recognized as legal under the Affordable Care Act include Christian Healthcare Ministries, Liberty HealthShare, Samaritan Ministries, Medi-Share, and Altrua HealthShare.[12],[13] MCS, formed after 1999, offers to pay its members tax penalties.

With increased media exposure in the past year and individual plan premium rates trending upward, will these ministries continue to see their memberships rise? Is the coverage they offer legitimate? We will examine the topic further in our next article: How Do Healthcare Sharing Ministries Work, and How Can Members Keep Healthcare Costs Low?




Legal Disclaimers

* The Federally-facilitated Marketplace is no longer granting these exemptions. Eligible individuals can still claim these exemptions on a tax return.

[1] Armour, Stephanie. “More People Turn to Faith-Based Groups for Health Coverage.” The Wall Street Journal. Jan. 4, 2016. http://www.wsj.com/articles/more-people-turn-to-faith-based-groups-for-health-coverage-1451867541

[2] Ibid.

[3] Healthinsurance.org. “What is a health care sharing ministry?” Accessed May 23, 2018. https://www.healthinsurance.org/glossary/health-care-sharing-ministry/

[4] Ibid.

[5] Armour, Stephanie. “More People Turn to Faith-Based Groups for Health Coverage.” The Wall Street Journal. Jan. 4, 2016. http://www.wsj.com/articles/more-people-turn-to-faith-based-groups-for-health-coverage-1451867541

[6] Ibid.

[7] Blase, Brian. “Overwhelming Evidence That Obamacare Caused Premiums to Increase Substantially.” Forbes. July 28, 216. http://www.forbes.com/sites/theapothecary/2016/07/28/overwhelming-evidence-that-obamacare-caused-premiums-to-increase-substantially

[8] Gaba, Charles. “Nevada: Approved 2017 *unsubsidized* indy mkt rate hikes: 10.6% (vs. 15% requested).” ACASignups.net. Oct. 7, 2016. http://acasignups.net/tags/2017-rate-changes

[9] Tully, Shawn. “6 Reasons Why Obama is Wrong About Obamacare.” Fortune. Aug. 22, 2016. http://fortune.com/2016/08/22/obama-wrong-obamacare/

[10] Department of Health & Human Services. “About 2.5 Million People Who Currently Buy Coverage Off-Marketplace May Be Eligible for ACA Subsidies.” ASPE Issue Brief. Oct. 4, 2016. https://aspe.hhs.gov/sites/default/files/pdf/208306/OffMarketplaceSubsidyeligible.pdf

[11] IRS.gov. “Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting.” Last reviewed or updated Sept. 27, 2016. https://www.irs.gov/affordable-care-act/individuals-and-families/aca-individual-shared-responsibility-provision-exemptions

[12] Wikepedia. “Health Care Sharing Ministry.” Accessed Oct. 9, 2016. https://en.wikipedia.org/wiki/Health_care_sharing_ministry

[13] Altrua HealthShare. “FAQ.” Accessed Oct. 9, 2016. http://altruahealthshare.org/faq/