Church Health Insurance: Budget-Friendly Health Insurance Options For Pastors And Church Staff
The cost of health insurance is one of the biggest concerns for churches and their pastors. Many churches have been forced to make difficult decisions regarding their health benefits to control costs.
Integrity Now Insurance Brokers offers group health insurance plans to churches and nonprofit organizations throughout the United States.
Our team of church insurance agents will evaluate your healthcare budget and find a plan that meets your health care needs.
What To Consider When Choosing Group Health Insurance Plans For Your Ministry?
1. Church Health Insurance: Premiums, co-pays, deductibles, and max out-of-pocket cost
When choosing a church health insurance plan, there are several factors to consider, including premiums, co-pays, deductibles, and maximum out-of-pocket costs.
- Premiums refer to the monthly cost of the health insurance plan, which can vary depending on the plan and the size of the family.
- Co-pays are the fixed amount that you pay for a medical service,
- Deductibles are the amount that you pay out-of-pocket before the insurance kicks in.
- Maximum out-of-pocket costs are the most an employee will pay for covered services in a plan year.
A low premium plan’s pros are that it is affordable and can fit within a small church insurance program budget. However, the cons are that they often come with higher deductibles and co-pays, which can add up to high out-of-pocket costs.
On the other hand, a high-premium plan may have lower deductibles and co-pays, resulting in lower out-of-pocket expenses in the long run. However, this plan may not be financially feasible for a smaller church insurance plan.
2. Church Health Insurance: Coverage types
Church health insurance plans offer various types of coverage to their employees, including medical, dental, vision, prescription drug, and mental health coverage. Each type of coverage has its benefits, limitations, and costs.
When considering which type of coverage to choose, it’s crucial to weigh the plan’s cost and how the coverage will work. Some coverage may be more expensive but offer more comprehensive benefits, while others may be more affordable but limit the services covered.
Discuss your coverage expectations with our group benefits insurance agents to ensure you don’t have any surprises.
3. Church Health Insurance: Monthly premiums
The cost of monthly premiums for church health insurance plans can be affected by several factors. These include the following:
- Types of coverage offered by the plan
- Deductibles, co-pays, and out-of-pocket expenses
- Size of the Network of doctors and medical facilities.
- Size of the church group enrolling in the plan
- The average age of the group
4. Church Health Insurance: Network access and restrictions
While it may be tempting to pick a group health plan by coverage and price, these plans may include hidden network access restrictions. Here is an example:
- Silver 70 HMO Plan – $3,500
- Silver 70 Select HMO Plan – $3,100
- Silver 70 Freedom HMO Plan – $2,800
- Silver 70 What Your Back HMO Plan – $2,200
While these plans are all “Silver HMO Plans” and, at face value, offer the same coverage (co-pays, co-insurance, deductibles, and max-out-of-pocket cost), the primary difference is network size. These plans will not reveal how big the network is, so the employee may lose access to a doctor if the church does not select the correct plan.
In the example, item one provides full network access to 135,000 doctors, while number two reduces the doctor access to 55,000. Number three on the list is reducing the network size to 18,000 doctors, and the final plan only includes 9,000 doctors within the entire network.
5. Church Health Insurance: Prescription drug benefits
When evaluating each group health plan, reviewing the costs associated with each plan is critical. Comparing Anthem vs. Cigna, one insurance company may offer great overall health benefits but impose high drug costs on each employee.
Employees must understand how the church insurance plans work to ensure they sign up for the best group plan.
Group Benefits Coverage Options For Churches
1. Group Health Insurance
Group health insurance coverage is a traditional route for finding health insurance. Our health insurance brokers will help create your church’s personalized health benefits program that provides group coverage for your pastors and church staff.
2. Group Dental Insurance
Offering dental insurance to church employees and their families can be a valuable benefit that can help attract and retain talented staff members. When choosing a dental insurance plan for a church, it is essential to consider costs, network sizes, and plan features.
PPO plans have higher costs and lower max benefits, but most dentists accept them. While HMO dental plans are more cost-effective and provide no max out-of-pocket benefits, they only include a small handful of dentists.
3. Group Vision Insurance Plan
Offing vision insurance greatly benefits church employees as many work on computers, which causes eye strain. Many available plans are affordable and provide good benefits.
4. Short-term Disability Insurance
Short-term disability insurance provides income replacement for employees who cannot work due to a covered illness or injury. Churches need to consider offering this coverage because it helps protect their employees from financial hardship if they become temporarily disabled and unable to work.
Short-term disability insurance typically covers a portion of an employee’s income for a specified period, usually 9 to 52 weeks. The income replacement percentage varies based on the plan selected but is generally around 60-70%.
5. Long-term Disability Insurance
Long-term Disability Insurance provides financial support to employees who cannot work due to an illness or injury for an extended period. Without this coverage, employees may face financial hardship and struggle to meet ends.
Once an employee has exhausted their short-term disability coverage, the long-term disability insurance steps in.
6. Group Life Insurance
Churches can offer group life insurance plans as a benefit option for their pastors and staff. This is a cost-effective way to support the pastor’s family during an unexpected death financially.
Group life insurance plans are typically inexpensive and can cover the entire staff.
7. Accident Insurance For Church Employees
Churches with high deductible health plans may purchase a secondary plan known as an Accident insurance policy. It provides coverage for unexpected accidents that may occur to an individual.
This type of insurance can benefit church employees by providing financial support for medical bills, lost wages, and other expenses associated with an accident.
8. Cancer Insurance Policy
A cancer policy can provide financial support when an employee is in crisis. If they are diagnosed with cancer, a cancer insurance policy can make a lump sum payment to help with the added expenses financially. While Medical insurance may pick up a significant portion of the bill, an employee may have added expenses such as daycare, high food and gas cost, and hotel stays.
The Best Health Plan Options For Churches
1. Platinum Health Insurance Plan
The platinum health plan has the lowest cost-sharing option for houses of worship looking to provide the highest medical coverage within a traditional group health plan. At the same time, these plans will also have the highest monthly premiums for the employer and employees.
Depending on the platinum plan, selected copays can range from $5 to $30 per doctor’s appointment. However, many of these health plans do not require a deductible.
It is vital to understand that even these top-tier health plans will include a range of network sizes for HMO, EPO, and PPO plan options. Church denominations needed the maximum medical costs covered by the health insurance company; the Platinum plan is the top choice.
2. Gold Health Insurance Plan
The Gold Health Insurance Plan offers exceptional health insurance coverage, while employees will incur slightly higher costs. Copays and deductibles are slightly higher with the gold plan, while some gold plans may not have a deductible for many medical services.
The gold plans for churches may be a good option for a younger place of worship as this will help in keeping the overall insurance premiums lower. Doctor visit copays can range from $30 to $50 per visit.
3. Silver Health Insurance Plan
Silver Health Insurance Plans are one of the most popular plans for employers as these plans can be thousands less than the platinum option. While not the most affordable health plan, it provides good coverage for your employees’ needs.
Employees will have higher costs when they use their health insurance; however, deductibles may only apply to outpatient surgery and hospitalizations. Doctor’s office visits will have higher copays of $45 to $75 per appointment.
5. Bronze Health Insurance Plan
Older church groups with limited budgets opt for the bronze-level plan as this is the most they can afford to provide to their employees. While these plans are more affordable for the church, many employees feel like their health insurance is self-funded due to the high cost of using their benefits.
Families on the bronze plans spend a lot of prayers asking God to help them stay healthy.
6. High Deductible Health Plan (HDHP)
A health insurance plan is classified as HDHP, meaning the individual must pay a certain amount out of pocket before insurance coverage kicks in. HDHPs typically have lower monthly premiums than other health insurance options, but the higher deductible can make them less appealing for individuals who require regular medical care.
HDHPs are typically found at the bronze-level benefit option and may be a good fit for relatively healthy individuals.
7. Health Reimbursement Arrangements (HRA)
Health Reimbursement Arrangements (HRA) is an IRS-approved health benefit that pastors and ministers can use to reimburse their employees for out-of-pocket medical expenses and individual health insurance premiums. The two most common types of HRAs are qualified small employer HRA (QSEHRA) and individual coverage HRA (ICHRA).
While QSEHRA is only for organizations with less than 50 employees, ICHRA is for organizations of all sizes. An HRA allows employers to set a monthly allowance of tax-free money they will offer their eligible employees to use on healthcare bills.
Employees can purchase the health insurance policy and healthcare essentials that work best for them with an HRA. However, it’s important to note that healthcare-sharing ministry membership fees or donations aren’t eligible for reimbursement.
The HRA has no contribution limits for ICHRAs and can be integrated with group health insurance. However, the QSEHRA has annual contribution limits set by the IRS.
8. Health Saving Accounts (HSA)
In the context of church health insurance options, a Health Savings Account (HSA) is an account that allows individuals to save money tax-free for medical expenses. HSAs are accompanied by high-deductible insurance plans, and the money saved in the account can be used to pay for deductibles and other medical expenses.
However, members of faith-based health plans cannot utilize HSAs. To be eligible to open an HSA, an individual must be covered by a traditional health insurance company and enrolled in a high-deductible health plan.
The benefits of having an HSA as a church employee include tax-free contributions, tax-free withdrawals for approved medical expenses, and the ability to roll over unused funds from year to year.
How does the Affordable Care Act affect church health insurance options?
The Affordable Care Act (ACA) has significantly impacted church health insurance options. Two provisions in the ACA that affect churches are the employer mandate and employer payment plans.
The employer mandate requires that all employers, including churches, with 50 or more full-time equivalent employees provide health insurance to at least 95% of their full-time employees and dependents up to age 26 or pay a fee. Although most churches have fewer than 50 full-time equivalent employees, the employer payment plan provision may affect them.
IRS Notice 2013-54 determined that employer payment plans do not meet the ACA requirements, and churches must now find alternative options. Churches and non-profits are not exempt from the ACA, and numerous provisions, including credits, notices, and potential fees, apply to employers and individuals.
All health insurance, whether employer-based or individually-based, must be ACA-qualified, meaning it is affordable and provides minimum essential coverage.
What are the eligibility requirements for a group church health insurance plan?
To be eligible for a group health insurance plan, a church must meet the insurance company’s eligibility requirements. This can include the following:
- At least two employees enrolling in the group plan
- Participate rates are met (typically 70% or more employees enroll in the plan)
- Provides the most current quarterly payroll report of all employees
- Contributes no less than 50% towards the health insurance cost or $100 per employee.
How does the Health Reimbursement Arrangement (HRA) work?
A Health Reimbursement Arrangement (HRA) is a type of health benefit plan that allows employers to reimburse their employees for qualified medical expenses tax-free. The employer sets aside a specific amount for each employee’s HRA account, which can reimburse the employee for costs like deductibles, copays, and other out-of-pocket medical expenses.
The employee can submit a claim for reimbursement to the employer, who then uses the HRA funds to pay for the expense. HRAs can be offered in addition to other health insurance plans or as a stand-alone option.
The funds in the HRA account belong to the employer. Any unused funds typically roll over yearly, allowing the employee to accumulate funds for future medical expenses.
HRAs are subject to specific regulations and limitations set by the Internal Revenue Service (IRS), and employers must follow these rules to maintain compliance. Many employers will hire a third-party administrator to ensure they comply with the IRS rules.
How does the Health Savings Account (HSA) work?
A Health Savings Account (HSA) is a type of account that allows individuals to save money for medical expenses.
Here are the benefits of an HSA account for employees and their families:
- Individuals can contribute pre-tax dollars to their HSA account through payroll deductions or by making contributions directly.
- The HSA account can pay for qualified medical expenses, such as deductibles, copayments, and prescriptions.
- The contributions to an HSA account are tax-deductible, which means they can reduce the individual’s taxable income for the year.
- The money in the HSA account grows tax-free and can be withdrawn tax-free if used for qualified medical expenses.
- Unlike Flexible Spending Accounts (FSAs), unused funds in an HSA account can roll over to the following year, allowing individuals to save for future medical expenses.
Work With A Church Health Insurance Agency: Integrity Now Insurance Brokers
With their partnerships with trusted health benefits advisors, they can provide options outside traditional group plans, simplifying the complex options and helping employees choose an individual plan that works best for them.
- Church property insurance
- General liability insurance coverage for churches
- Workers’ compensation insurance
- Business Auto Insurance
- Group Health Insurance for religious organizations
- Health Sharing Ministry Options
- Dental Insurance
- Term life insurance for pastors and church staff
- Medicare Insurance (Medigap, Medicare Advantage Plans, & Part D Prescription Drug Coverage)
- Accident Insurance
- Short-term and Long-term Disability Plans
- Small Business Insurance
- Building Insurance For Churches
- Old Church Insurance