How To Avoid Insurance Mistakes as a Church Plant – 5 Tips for First-time Church Medical Coverage

By Scott Charbonneau
Managing Director of Insurance Solutions

Planting a church comes with a mile-long list of tasks and decisions that can help or hinder the success of your church. Where should we meet? What support do we have? How do we get the word out?

Often, benefits take a backseat in the hustle and bustle of planting a church. And although sharing Christ and growing a healthy ministry is — and should be — your driving priority, establishing a solid financial structure is a foundational element that helps keep your ministry moving and resilient.

When stacked against the other decisions to make for your church, medical coverage seems like just another checklist item, but it is so much more than that. 

  • Salaries and benefits make up a large component of any organization’s budget. 
  • We are called to good stewardship of our resources, so it is important to make wise decisions and find the best value of a health plan for your ministry. 
  • Offering coverage allows access to proper care so you can stay well and avoid burnout.

At GuideStone®, we acknowledge and understand that limited resources and finances are part of church planting ministry, but we also want to give you a headstart on crafting your benefits strategy as early as possible. As Paul reminds us, “… let us work for the good of all, especially for those who belong to the household of faith.” Galatians 6:10 (CSB)

With all of this in mind, here are five helpful tips as you explore your options to find the best health plan for your church plant and employees. 

1. Consider a Benefits Strategy that Maximizes Tax Benefits 

When deciding how to structure your benefits, consider the tax implications. Employer-provided group health coverage is the most well-known and widely-used strategy, but other alternatives are available, including offering a stipend for employees to purchase an individual health plan.

While stipends are less expensive for the church, they are not considered true health benefits by the IRS. Because of this, stipends are considered additional income and are taxed at the employee’s highest tax bracket. This cuts down on the amount of money your employees have to afford adequate coverage and what is left for their living expenses. 

On the other hand, employer-provided health coverage comes with a valuable financial advantage for your employees: It is tax-free, allowing that portion of your church budget to go towards its intended purpose — health care. 

Learn more by checking out our compensation planning resources for your church

2. Consider the All-In Cost 

The primary budget line item that informs most health coverage decisions is the monthly cost or premium; however, there are other out-of-pocket expenses to consider that could have a huge impact on the overall price tag of the plan — especially for your employees. 

It’s a good idea to consider the deductible, co-insurance and maximum out-of-pocket (MOOP) that may be incurred under a plan. Watch this video to learn more about these and other important terms. 

The plan that is best suited for you will depend on how you utilize health coverage. 

  • Do you frequently visit a doctor?
  • Do you take maintenance medications?
  • Do you anticipate high upcoming medical expenses?

Lower deductible plans usually come with higher monthly costs, but this arrangement may end up saving money if it allows a high utilizer to reach co-insurance faster. Make sure that your plan fits your health care needs as well as your budget.

3. Consider What Types of Care Are Covered 

In addition to the all-in cost of the plan, make sure your plan includes affordable access to the care your employees need.

  • Do you visit a specialist often?
  • Do you utilize maintenance or specialty prescription drugs?
  • Are you in a rural community that may not have access to in-network doctors?

The cost of out-of-network care is often substantially higher than staying in-network, so evaluate how comprehensive a plan’s network is and if major hospitals and popular providers in your area are in-network. If the network is narrow, it may cause you to stop seeing your preferred providers or incur large bills if you visit an out-of-network hospital during an emergency. 

Another area to evaluate is prescription coverage. Some plans include minimal prescription coverage and are not the best option for individuals on maintenance medication. Others offer discounts on medications received by mail, so taking advantage of that could save you money. 

Lastly, see if your potential plan includes low or no-cost telehealth access to help you cut down on costs for non-emergency situations. 

4. Consider Needs Beyond Health Coverage  

While health plans are a major benefit, adding options beyond health coverage can make a huge difference for your ministry.

  • Life Insurance – Life insurance protects your beneficiaries in their darkest hours and serves as a safety financial safety net during your employees’ crucial income-earning years. Life insurance is also important from a risk management perspective to your ministry. When a tragic loss is experienced, you want to be able to financially care for the family. Life insurance allows you to offer substantial support without risking your ministry’s financial stability. 
  • Accident Insurance – Accidental Death and Dismemberment (AD&D) insurance pays to help with expenses resulting from a serious injury or accidental death. If someone dies from a tragic accident and has both life and AD&D coverage, they can be double indemnified, effectively doubling an employee’s coverage — often for just pennies a day.
  • Disability Insurance – Disability insurance protects your paycheck by replacing a portion of your income in the case of a period of disability. 

Property and Casualty –Property and casualty coverage covers everything from property damage to the casualties of injuries that occur at your church. Ensure that your plan is tailored to the unique aspects of church liability coverage. 

5. Consider Coverage That Aligns with Your Values 

As Christians, our beliefs have implications that extend to every facet of our lives, even the choice of health coverage. Many plans that are widely available have provisions that touch on moral issues. As a ministry employer, take a moment to see if a health plan’s details are compatible with the stance you take on issues such as life and family. 

In today’s world, compromise seems increasingly unavoidable, but with GuideStone, it’s possible to maintain biblical convictions without compromising on the quality of your health coverage. 

We are here to walk alongside your church and provide you with biblically-minded guidance through the many decisions you will face. We believe that when the body of Christ is healthy, it’s free to transform the world, so we provide coverage made for ministry, including health plans, life insurance, accident insurance and property and casualty insurance.

Have insurance strategy questions or ready to learn more?

Let’s Talk

Scott Charbonneau is the managing director of insurance solutions at GuideStone. He has served at GuideStone since 2002. Scott has a Bachelor of Science in industrial distribution from Texas A&M University and a Master of Business Administration from Baylor University. Scott has served in multiple capacities at GuideStone, giving him a vast knowledge of retirement, property and casualty, and insurance solutions for churches and ministries. In addition to helping clients, Scott serves as a deacon and life connection teacher at First Baptist Church, Hurst, Texas, where his wife, Kellie, is the children’s minister. He is the past president of the Hurst Heritage Foundation and a board member of Strong Marriages. He has served on mission teams, sharing God’s love in North Dakota, West Africa and East Asia. Scott and Kellie have two sons, Keeton and Kyle, and a daughter, Kendall.