Top 5 Church Health Coverage Questions Answered

Today, many churches and ministries grapple with the challenge of providing health care coverage for their staff — regardless of their size. Health care coverage can bring peace of mind to ministry employees, but navigating the complex issues of selecting the right health plan can feel daunting. Whether you’ve been tasked with choosing church coverage for the first time or are seeking new strategies to improve your church’s existing offerings, these top five most common church health coverage questions are a great place to start. 

• Are churches required to provide health coverage?
• How does Christian health coverage work?
• How much does a Christian health plan cost?
• Can a church provide an individual health plan for a pastor?
• Can a church reimburse a pastor and employees for health coverage?

1. Are churches required to provide health coverage?

Whether your church must provide health coverage depends on the size of your church, as churches are not exempt from the Affordable Care Act’s (ACA) requirements. According to the ACA, organizations with 50 or more full-time employees are considered applicable large employers (ALEs) and are mandated to offer at least minimum essential coverage (MEC). If an ALE does not offer the minimum level of coverage, it must pay a “shared responsibility payment” or penalty if the employee who obtains coverage receives a premium tax credit or cost-sharing reduction. The fines that the ACA imposes can be severe, so it is recommended that large employers provide health coverage to avoid penalties. At GuideStone®, all of our available health plans fulfill the MEC requirements.

However, any employer with fewer than 50 full-time employees is not required to provide health coverage. Most churches fall into this category and are not required by law to provide health plans to their employees. While small churches will not face fines for not providing health coverage, it is best practice to do so since health coverage can factor into employee retention and provide a financial safety net for church employees and their families, allowing them to access the care they need. Thanks to the advantageous design of the GuideStone church health plan, individuals and groups with as few as two employees can now access rich health plans with built-in features typically only available to large groups.

2. How does Christian health coverage work?

While most mainstream health insurance coverage options have secular providers and plans, churches and ministries can consider Christian coverage alternatives such as health sharing and church plans.

• Health sharing plan – This health coverage arrangement functions when members, who are often professed believers, share the cost of all other members’ medical bills. Health sharing often has Christian-based coverage exclusions and often does not cover pre-existing conditions. Notably, while these types of plans are legally recognized by the ACA for individual coverage, they are not true insurance and are not regulated as such, so there is no guarantee of coverage from the sharing plan, and members’ monthly payments are not tax deductible as medical expenses. In some health sharing arrangements, members pay their medical bills upfront and then request reimbursement from the sharing plan.
• Church plan – A church health plan is established and maintained by a church, a convention or an association of churches and is potentially a lower-cost alternative to traditional insurance providers. Since church plans are composed of many churches and ministries, smaller churches may be able to obtain group rates and access to programs and features that are unavailable to them in the larger market. Church plans are exempt from certain federal coverage requirements, so they are able to offer coverage that aligns with biblical views of life and family. GuideStone falls under this category and brings together Christian plan design, nationally recognized networks and plan features to serve like-minded churches and ministry nonprofits.

Learn more about popular ministry health coverage strategies along with their advantages and disadvantages.

3. How much does a Christian health plan cost?

Just like in traditional insurance plans, the cost of a Christian health plan depends on the type of plan chosen and employee demographics, including:

• Age
• Medical history
• Marital status
• Location

In short, everyone pays something different depending on their needs. GuideStone churches go through underwriting to determine the rate based on the above factors. Churches typically split the cost of the health plan, with the employer covering a certain percentage of the monthly cost and the employees paying the rest.

4. Can a church provide an individual health plan for a pastor?

Yes, any employer — including churches — can provide individual health coverage to an employee as long as they only have one employee on staff. If the church has more than one employee, the church can work with a benefits consultant to make other arrangements, such as offering their employees an ICHRA (Individual Coverage Health Reimbursement Arrangement). This allows churches to offer money to employees seeking individual coverage with some tax advantages.

5. Can a church reimburse a pastor and employees for health coverage?

Yes, a church can reimburse its employees for health coverage through options like an ICHRA (mentioned in #2) or a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement). However, reimbursing employees incorrectly can easily lead to taxable income for the employee and/or the employer. We recommend working with a qualified professional to determine the best strategy for your specific church or ministry and how to correctly implement it.

Prioritizing benefits like health coverage may not only be a legal obligation but also a genuine act that demonstrates care, concern and appreciation for dedicated ministry staff. In your journey to find the right coverage strategy for your team, we advise conducting thorough research and enlisting the assistance of proven and reputable professionals.

At GuideStone, we are here to guide, advocate and provide for churches and ministry nonprofits with benefits and financial resources. As experts in what makes ministry coverage unique, we would love to help you strategically pick the right insurance coverage for your church — taking the whole picture into account.