7 Facts You Should Know About Healthcare Sharing Ministries

Author: Michael Smith

As an alternative to traditional health care insurance, health care sharing ministries (HCSMs) have been in existence for many years; however, they have only recently experienced surges in membership as a result of the implementation of the Affordable Care Act (ACA) that began in 2010. Through its mandate, the ACA has forced many people into buying health insurance. Some have found health insurance to be too expensive, not sufficient to meet their needs or incompatible with their religious beliefs. This has raised the profile of HCSMs, resulting in more media attention and questions from the general public as to what they are all about. The following are seven facts about HCSMs everyone should know.

1. HCSMs Facilitate Medical Cost Sharing

An HCSM is a nonprofit organization that pools together monthly deposits made by members to pay for medical costs incurred by members. Members generally pay their own low medical costs, but when they have large medical expenses, they contact the ministry, which then facilitates the sharing of the costs among members. If the medical bill presented meets the eligibility requirements, and the member has already covered his annual unshared amount, the bill is shared.

2. HCSMs Coverage Is Not Insurance Coverage

HCSMs do not provide insurance coverage. There is no PPO or HMO. Members pick their own medical providers, negotiate their own costs and pay their own medical expenses. The ministry is there to provide financial assistance for covered treatment or procedures after they occur.

3. HCSMs Are Not Bound by Regulation

Because HCSMs do not provide minimal essential coverage as described by the ACA, they are not bound by any state or federal regulations to provide the same level or type of coverage as other health plans. They are not required to offer any guarantee of coverage. In addition, if an HCSM becomes insolvent, members have no recourse for recovering any monetary losses.

4. Eligible HCSMs and Their Members Are Exempt From ACA Requirements

When the ACA was being written, members of Congress had an exemption added under the same principle that allowed the Amish to be exempted from the law's requirements. The main eligibility requirement for the exemption is an HCSM had to be in operation before Dec. 31, 1999. In addition, an HCSM must meet the following requirements:

• Be a nonprofit organization as described under section 501(c)(3);

• All members must share in a common belief system and share medical costs according to these beliefs;

• Members cannot be disqualified after they develop medical conditions;

• Must submit to an annual audit conducted by an independent certified public accountant (CPA).

Based on these requirements, there are only four HCSMs that have been granted exempt status: Samaritan Ministries, Christian Healthcare Ministries, Medi-Share and Liberty HealthShare.

5. HCSMs Have Strict Rules for Membership Eligibility

Just because you want an alternative to ACA coverage does not make you eligible for membership in an HCSA. HCSA have strict rules and standards that must be met. These include:

• No tobacco or illegal drug use;

• Limited alcohol use;

• No sex outside of marriage;

• No contraception use;

• Regular church attendance.

Generally, HCSMs limit their memberships to people who share their Biblical faith. The success of the HCSM model is predicated on members sharing the core value of taking care of one another as Christians.

6. Preventative Care Costs and Small Expenses Are Not Covered

HCSMs believe their members should be doing everything possible to live healthy lifestyles, so they do not cover preventative care. This includes exams and tests such as colonoscopies. They also do not cover small expenses that fall within a member's annual unshared amount, which is similar to a deductible. Generally, HCSMs only cover large medical expenses.

7. HCSMs Do Not Have to Cover Pre-Existing Conditions

HCSMs may distinguish between pre-existing conditions in active treatment and maintenance treatment. If you become a member with a pre-existing condition that is being actively treated, any bills related to that treatment are not shared. However, once your treatment becomes maintenance or routine, your medical bills are eligible based on a graduated schedule of treatment. For instance, a bill presented during the first year of maintenance treatment may be eligible for sharing of up to $15,000. That amount increases for three years, and after the third year, the condition is no longer considered pre-existing.

Bills presented for maternity care cannot be shared unless members have due dates at least 300 days after joining the HCSM. Each HCSM offers varying levels of maternity coverage based on the amount the member is willing to contribute in monthly deposits.