If you're looking into a Health Care Sharing Ministry or an Individual Coverage Health Reimbursement Arrangement (ICHRA), you're probably an innovator. A common question we are asked is whether Health Sharing Ministries can they be reimbursed by an ICHRA? How do the two health care mechanisms interact? This article answers these questions to help you make an informed decision.
TLDR: ICHRAs cannot be used to reimburse Health Care Sharing Ministries.
This means you face an "either or "situation. You can either buy a Health Care Sharing Ministry for your team or you can set up an ICHRA. Let's dig in further to each option:
What are Health Care Sharing Ministries?
Health Care Sharing Ministries are cooperatives where members share health care costs. While they are often more flexible than traditional insurance, it's essential to understand their limitations alongside their benefits.
- Cost Savings: Generally, lower monthly costs compared to traditional insurance.
- Community Support: A sense of belonging and mutual assistance.
- Holistic Health Focus: Encouragement of healthy lifestyles and preventive care.
- Transparency and Accountability: Member involvement in decision-making.
- Lack of Guaranteed Coverage: Unlike insurance, these ministries are not obligated to cover all medical expenses, which can lead to uncertainty in coverage.
- Exclusions Based on Lifestyle or Beliefs: Members may need to adhere to specific lifestyle choices or religious beliefs, potentially excluding some individuals.
- Limited Coverage for Pre-existing Conditions: Many ministries have restrictions on covering pre-existing conditions, which can be a significant drawback for those with ongoing health issues.
- Lack of Legal Obligation to Pay: These ministries are not legally bound to cover medical expenses, which can pose a risk in times of major medical needs.
- Limited Regulatory Oversight: Health Care Sharing Ministries are not regulated like traditional insurance, leading to potential inconsistencies in how funds are managed and disbursed.
- No Coverage for Certain Procedures: Some procedures, especially those not aligned with the ministry's beliefs, may not be covered.
What are ICHRAs?
ICHRA is an employer-sponsored plan that allows employees to choose their health coverage. How? Employers provide pre-tax cash. Employees take this money and buy an individual health insurance plan.
- Personalized Health Benefits: Employees have the freedom to select health plans that best suit their needs.
- Out-of-Pocket Costs Covered: ICHRA funds can be used to cover out-of-pocket health care costs, such as co-pays, prescriptions, etc.
- Pre-Existing Conditions Covered: Insurers cannot charge consumers more or bar them from coverage if they have pre-existing conditions.
- No Coverage Limits: Insures are legally prohibited from setting "coverage maximums." If you need one million dollar in coverage, your health plan has to pay.
- Stricter Consumer Protections: Insurance is closely regulated to make sure they have the cash reserves to pay their members' claims. In contrast, Health Care Sharing Ministries are not regulated in the same way. Some Health Care Sharing Ministries have famously stuck their consumers with huge bills.
- Potential Complexity in Plan Selection: Choosing the right plan can be complex and feel overwhelming. However, Venteur's AI decision support tools can help!
- Variability in Coverage Options: The range and type of coverage can vary significantly depending on where you live.
ICHRAs vs. Health Care Sharing Ministries
Health Care Sharing Ministries offer a unique approach to health care with a strong community aspect but come with significant limitations. ICHRA provides flexibility but cannot be used for Health Care Sharing Ministries. Understanding these details is key to navigating your health care options effectively. Don't hesitate to get in touch if we can answer any questions for you!