What You Should Know About Health Care Sharing Ministries

Family at church
Paul Burns/Creative RF/Getty Images

Health care sharing ministries (HCSMs) are programs under which groups of people who share a common faith make monthly payments that are used to cover the cost of members' medical care. Some HCSMs instruct members to send their payments directly to other members who have recently incurred medical bills, while others gather members' payments into a pool of money that is then sent out to pay medical bills for members who have claims.

HCSMs are not health insurance, and they do not provide minimum essential coverage under the Affordable Care Act. But although the IRS assessed a penalty on people who did not have minimum essential coverage between 2014 and 2018, there was an exemption for health care sharing ministry members.

The ACA's requirements for penalty exemptions for HCSM members were outlined on page 148 of the text of the law (Section 1501). The exemption applied as long as the HCSM had been in existence and continuously sharing members' health care costs since at least December 31, 1999. There was a requirement that the HCSM continue to include members after they become ill, and must have an annual audit performed by an independent accounting firm. And the members of the HCSM had to "share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs."

But it's important to understand that even when HCSMs complied with these requirements, they were not considered health insurance, and were not required to be compliant with any of the ACA's rules for health insurance plans. So for example, they didn't have to cover pre-existing conditions or provide essential health benefits, and they could still impose annual and lifetime benefit caps.

In the majority of the states, health care sharing ministries are explicitly exempt from health insurance rules and regulations. And crucially, HCSMs are not under a contractual obligation to pay members' medical claims. They generally make this clear in their enrollment paperwork, but members might not fully understand the ramifications of the lack of a guarantee of coverage until they incur a significant medical expense (and to be clear, HCSMs sometimes provide excellent coverage of large medical claims).

Many HCSMs are run by small Amish and Mennonite churches and have fewer than 100 members (note that the ACA's religious exemption from the individual mandate—which is different from the HCSM exemption—also applies to Amish and Old Order Mennonite congregants). But the large majority of HCSM members participate in health care sharing via one of the three largest HCSMs, run by Samaritan Ministries, Christian Care Ministry (Medi-Share), and Christian Healthcare Ministries.

No Longer a Need for Penalty Exemption. But HCSMs are Still Not Minimum Essential Coverage

Now that the ACA's individual mandate penalty has been reduced to $0, there is no longer a need for HCSM members to obtain an exemption from the individual mandate penalty. So there's no longer a need, for example, for HCSMs to have been in operation since 1999. A newer HCSM can enroll members and function just like any other HCSM—their members would not be eligible for a penalty exemption under the ACA, but that's no longer an issue since there is no longer a federal penalty for being without minimum essential coverage.

It's important to understand, however, that the concept of minimum essential coverage continues to be relevant in terms of qualifying for a special enrollment period to purchase ACA-compliant coverage. Special enrollment periods are granted when a person experiences a qualifying event that allows them to enroll in an ACA-compliant plan outside of the normal annual enrollment window. But in most cases, the applicant must have had minimum essential coverage prior to the qualifying event in order to trigger a special enrollment period. In other words, most qualifying events allow for plan changes, but don't necessarily allow a person to go from being uninsured to being insured (there are some exceptions where prior minimum essential coverage is not necessary).

If a person is enrolled in a health care sharing ministry plan, that does not count as minimum essential coverage. So if they experience one of the qualifying events that require prior coverage in order to trigger a special enrollment period, they would not be able to enroll in an ACA-compliant plan at that point. For example, if they lose coverage under the health care sharing ministry for some reason, it would not trigger a loss-of-coverage special enrollment period, because the coverage that's ending—the health care sharing ministry plan—is not considered minimum essential coverage.

Membership Has Grown Considerably in Recent Years

Total HCSM membership has grown significantly in the years since the Affordable Care Act was implemented. There were an estimated 110,000 sharing ministry members in 2010, and that had increased to over a million by 2018.

Several factors account for the growth in HCSM membership, including some Christians' desire to avoid health plans that cover services like contraception and abortion and opt instead for plans that share health care costs with fellow Christians in a more Biblical manner. In addition, HCSM memberships are often less expensive than health insurance premiums, although that varies considerably depending on whether or not the household qualifies for premium subsidies in the health insurance exchanges.

What You Need to Know

If you're considering dropping your health insurance in favor of HCSM membership, here's what you need to know:

  • HCSMs are not health insurance, and they don't come with the guarantees, mandates, and consumer protections that are standard on health insurance plans. In 30 states, the insurance laws and regulation in those states specifically do not apply to HCSMs, and the state insurance department will not be able to intervene on a member's behalf if problems arise.
  • However, HCSMs are 501(c)(3) charities, so they are regulated by the Internal Revenue Service and state attorneys general.
  • HCSMs do not have to follow ACA regulations. This means they don't have to cover the essential health benefits, they can (and do) still exclude pre-existing conditions, and they can (and do) impose annual and lifetime benefit caps.
  • There are concerns that HCSMs could undermine the stability of regular health insurance risk pools. That's because HCSMs tend to attract healthy enrollees since they generally don't cover pre-existing conditions (some do, but usually only after a person has been a member for a specified amount of time). They also require members to shun things like sex outside of marriage, tobacco use, illegal drugs, and alcohol abuse, which further helps to improve the overall health of their membership. But by default, that results in a less-healthy overall risk pool for regular health insurance plans, and ultimately, higher premiums.
  • HCSMs can refuse to share claims that result from prohibited behavior. So an unmarried pregnant woman would be ineligible for maternity benefits, and things like treatment for alcohol or drug abuse wouldn't be shared with other members.
  • If you end up needing healthcare that's not covered by your HCSM, or if your bills exceed the sharing caps imposed by your HCSM, you'll have to wait until the next open enrollment period to sign up for an ACA-compliant health plan, unless you have a qualifying event. And as noted above, many qualifying events only trigger a special enrollment period if you already had some type of minimum essential coverage in place—and sharing ministry plans are not minimum essential coverage.
  • HCSMs can have PPO networks (members would be responsible for additional charges if they go outside the network), or can share members' costs regardless of what doctors and hospitals are used—it depends on the HCSM.
Was this page helpful?

Article Sources

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial policy to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Internal Revenue Service. Questions and Answers on the Individual Shared Responsibility Provision.

  2. Volk, JoAnn; Curran, Emily; Giovannelli, Justin. The Commonwealth Fund. Health Care Sharing Ministries: What Are the Risks to Consumers and Insurance Markets?

    August 8, 2018.

  3. Anderson, Steve. healthinsurance.org. Insider's Guide to Obamacare's Special Enrollment. December 20, 2019.

  4. Moody, Katherine. Fierce Healthcare. Faith-based coverage could threaten ACA stability. Jan 4, 2016.