A health share program, often called a Health Care Sharing Ministry, is a non-insurance option for managing the financial burden of unexpected medical events. These cooperative organizations pool members’ funds to help pay for one another’s eligible healthcare expenses. They offer an alternative for individuals seeking lower monthly costs outside of traditional, government-regulated health insurance policies, focusing on a community-based approach to cost management.
Organizational Structure and Core Definition
Health share programs are typically established as non-profit, faith-based organizations, often structured as 501(c)(3) entities. Their foundation is a shared set of religious or ethical beliefs among members. This structure defines them as ministries coordinating voluntary financial aid, not as insurance companies.
The central difference from insurance is the concept of “sharing” versus paying a premium. Insurance involves paying a premium to transfer financial risk, contractually guaranteeing payment for covered services. Health share members make a monthly contribution, which is a voluntary gift to the community pool, with no guarantee that their medical needs will be paid. Eligibility often requires individuals to abide by the ministry’s moral or religious guidelines, such as abstaining from tobacco and excessive alcohol use.
How Medical Costs Are Shared
The operational mechanism begins with each member submitting a regular monthly contribution, known as a “share amount,” into the communal fund. These contributions create the pool of money used to address eligible medical expenses. When a member incurs a medical expense, they are responsible for an Initial Unshareable Amount (IUA), which is an initial out-of-pocket cost.
The IUA functions similarly to a deductible and must be met by the member before sharing begins. These amounts vary significantly by program and membership tier, often ranging from $500 to $5,000 for an individual. Once eligible medical expenses exceed the IUA, the organization submits the remaining bills for review.
The ministry’s administrative staff vets the submitted bills against the program’s guidelines to determine eligibility for sharing. If approved, funds from the communal pool are used to pay the medical provider or reimburse the member. Some programs pay the provider directly, while others send the funds to the member to pay the bill, which differs from the direct payment model of most insurance carriers.
Regulatory Status and Legal Exemptions
Health share programs operate outside the oversight of state departments of insurance because they are legally defined as ministries, not insurance companies. This distinction means they are not bound by solvency requirements, consumer protection regulations, or guaranteed payment obligations that apply to commercial insurers. Members must understand that payment of a medical expense is a voluntary act of sharing, not a contractual obligation.
Their status is significantly related to federal law and the Affordable Care Act (ACA). Although the ACA initially mandated minimum essential coverage (a requirement later repealed), the law included a specific exemption for members of a qualified Health Care Sharing Ministry. This exemption is codified in 26 U.S.C. § 5000A(d)(2)(B).
To qualify for this federal exemption, a health share ministry must meet specific criteria, including being a 501(c)(3) non-profit organization and having been in continuous existence since December 31, 1999. This status allows members to satisfy the federal requirement for having health coverage, even though the program is not considered insurance. The lack of regulatory oversight means members do not have recourse to state insurance appeals processes if a claim is denied.
Practical Differences from ACA Plans
The absence of insurance regulation results in several practical differences compared to ACA-compliant plans. One major distinction involves pre-existing conditions. While ACA plans must cover these immediately upon enrollment, health share programs typically impose waiting periods, often a year or more, before sharing related costs. Some programs may even permanently exclude certain conditions from sharing eligibility.
Another contrast is the required scope of coverage, known as Essential Health Benefits (EHBs), which are mandatory in ACA-compliant individual and small group plans. Health share programs are not required to cover these ten categories of benefits, which include maternity and newborn care, mental health services, and prescription drugs. Consequently, many ministries either limit or exclude sharing for these services, reflecting their faith-based or ethical guidelines.
Additionally, while ACA plans are prohibited from imposing annual or lifetime dollar limits on EHBs, health share programs may apply such caps. This means that once a pre-determined maximum amount of sharing is reached, the member becomes responsible for all subsequent costs. Consumers considering a health share program must carefully review the sharing guidelines to understand these limitations, as they represent the consumer’s maximum financial exposure in the event of a catastrophic illness.