By Scott Charbonneau
Managing Director of Insurance Solutions
GuideStone Financial Resources
It’s time to choose an employee health plan for 2021. So how do you know which health plan strategy is right for you and your team?
At GuideStone®, our mission is to serve you as you serve the Lord — and that means making sure you have all the information you need to make the right health plan choice for your church or ministry.
That’s why our team of experts did the background work for you on five of the most popular health care strategies. We’ve summarized the key benefits and risks below, so let’s get started on helping you find the right strategy for you and your team.
BENEFIT STRATEGY 1: THE MARKETPLACE
The individual Marketplace and the Small Business Health Options Program (SHOP) were introduced with the Affordable Care Act (ACA) in 2010. Individuals who are not offered coverage through their employer that is affordable or of minimum value as defined by the ACA may purchase coverage through the individual Marketplace (aka, the exchange). Churches and ministries with up to 50 employees may purchase group coverage through SHOP.
- For individuals, plan choices range from bare-bones bronze plans, covering about 60% of the participant’s eligible expenses, up to benefit-rich platinum plans, covering 90% of eligible expenses.
- In 2019, 87% of the 11.4 million people enrolled in Marketplace plans received federal subsidies, which lowered their average monthly premium to $87.
- SHOP uses a simple rate calculation formula of ZIP code plus participant’s age.
- Employers may begin offering coverage at any time of year and set their own eligibility waiting periods. Tax credits and premium assistance are also available.
- There is no centralized place to compare plans, so most employers work with a broker.
- Using a Marketplace plan to receive care can be a challenge because most provider networks are narrow, making it difficult to find in-network providers.
- Eligibility must be re-established each year, and the simplistic rate calculation formula can force healthier groups to pay higher premiums than their risk level warrants.
The Bottom Line: Individual plans may be a good fit for those who qualify for a subsidy, have the time and ability to find a plan and are comfortable receiving care within the narrow network. The SHOP Marketplace may work for ministries who have the patience to find a plan that fits their needs.
BENEFIT STRATEGY 2: FULLY INSURED GROUP COVERAGE
The fully insured group market is dominated by four carriers: Blue Cross Blue Shield, UnitedHealthcare, Cigna and Aetna, who provide coverage to 116 million Americans. These carriers set the standards for much of today’s health care.
- Fully insured plans are easy to find and offer a wide variety of plan choices.
- Your employees and their medical providers can easily navigate them because they are the most common form of group coverage.
- The carrier assumes responsibility to pay claims.
- Groups with 50 or fewer employees could pay higher rates than their risk warrants.
- The plans are created for secular businesses and will not conform to biblical values. They will provide coverage for procedures such as abortion.
The Bottom Line: Purchasing a fully insured plan is generally safe and easy. The companies have a favorable record of providing solid group medical benefits to large, secular employers. However, ministries and employers with fewer than 50 covered employees may find higher rates, impersonal service and plans that do not fit their needs.
BENEFIT STRATEGY 3: SELF-FUNDING
In this arrangement, the employer assumes all responsibility to pay the employees’ claims for health care expenses rather than paying a private insurer.
- Self-funding allows employers to retain control of every aspect of the plan from design to administration.
- The monthly costs can be lower than paying traditional premiums.
- Your benefits staff will assume responsibility for funding, administration, federal reporting, compliance and claims management.
- Some employers pay a third party to handle some of the administrative heavy lifting.
- Self-funding comes with significant financial obligations, including management of a sizable reserve fund to pay claims and stop-loss coverage to protect against claims in excess of reserves.
- It will be difficult to create a plan that conforms to biblical values.
The Bottom Line: Because of the financial risks and extra administration involved, only very large employers are successful at self-funding.
BENEFIT STRATEGY 4: MEDICAL SHARING
Medical sharing plans connect individuals to share the cost of all members’ medical bills. Each member contributes a monthly share amount, pays his or her own medical bills up front and requests reimbursement from the plan.
Medical sharing plans were created for individuals and families, but some churches are now offering sharing plans in lieu of group medical insurance.
- Sharing plans typically cost less than traditional insurance and are recognized by the ACA yet are exempt from many ACA regulations.
- Many plans exclude coverage for unbiblical services, such as abortion.
- Some health sharing plans offer no discount provider networks and no guarantee of payment.
- There may not be coverage options for employees serving internationally.
- Pre-existing conditions and prescription drugs are many times not covered.
- The cost of monthly shares and, in some cases, payment of personal medical bills may not be tax-deductible.
- Sharing plans generally force participants to assume greater financial and administrative burdens.
The Bottom Line: Medical sharing plans can be an adequate solution for healthy individuals. However, offering sharing plans in lieu of traditional group plans may come at a long-term cost. Individuals using these plans may incur additional financial burdens and be forced to devote extra time to managing administrative tasks.
BENEFIT STRATEGY 5: CHURCH HEALTH PLAN
A church health plan is established and maintained by a church, a convention or an association of churches. These plans offer true group medical coverage to employers within certain parameters. GuideStone is a church health plan chartered by the Southern Baptist Convention and now offering coverage to the wider evangelical community.
- Because most church plans are not-for-profit, they have greater flexibility in setting rates, making them a lower-cost option.
- They can offer group coverage to smaller groups who might not qualify as a group in other situations.
- Church health plans bring together benefits from a number of providers to create their plans, allowing churches to have the best of the best. For example, GuideStone plans give members access to the nationwide Blue Cross Blue Shield network, one of the largest provider networks in the United States.
- GuideStone’s church plan also fought for the right to provide benefits that reflect your biblical values. That means your Christian organization’s benefit dollars will not go toward funding abortions.
- Because these are niche market plans, there will not be hundreds of options from which to choose.
- Some organizations will not meet the eligibility requirements.
The Bottom Line: Church health plans are a unique option in the overall employee benefits market. These plans harness the power of multiple organizations to create group plans for churches and ministries of all sizes. Church health plans can be a good fit for most churches and Christian organizations.
Which strategy is right for your church or ministry?
When it’s time to shop for a group health plan, the experts at GuideStone can walk with you as you review your organization’s needs. They are also well-versed in the details of each of these strategies and can help you analyze the risk and benefits of each. As always, their goal is to help you find the option that best fits your organization’s needs.
You can learn more about GuideStone plans by visiting Insurance.GuideStone.org.
Scott Charbonneau is Guidestone’s Managing Director of Insurance Solutions.