Tim's small church had just lost a key employee. They were feeling devastated about it. With Tim being the Elder in charge of the finances, he felt it even more since the employee had indicated that the lack of health insurance was a major factor in moving on. Tim had been wondering when the church's inability to provide a traditional group health insurance plan was going to catch up with them.
Tim wasn't sure what his next move was going to be. The potential employee base in Lubbock, where the church is located, is similar to the rest of Texas. They are looking for health insurance benefits of some kind as part of their compensation. It is just too big of a risk for them to overlook it and let's face it. The ACA Exchange Marketplace Plans in Texas can leave people very frustrated. The biggest problem is finding coverage for a small team of three employees, including the beloved pastor.
Tim knew that the church couldn't afford a full-blown health plan. But he was determined to find a way to provide some form of health coverage. He had heard of catastrophic health insurance coverage, but didn't really know many details and it seemed complicated. But he knew that balancing a limited budget while trying to offer meaningful benefits to employees needed to happen. Finding a cost-effective solution that still provides adequate coverage for the church staff was his problem and task when he called us.
Tim understood that offering healthcare benefits to church employees is essential for several reasons. First and foremost, it helps attract and retain dedicated staff who are vital to the church's mission. When employees feel valued and secure in their health, their job satisfaction increases, leading to a more committed and productive workforce. Additionally, the financial cost of replacing employees can be significant, often far exceeding the cost of providing health insurance. Healthcare benefits also promote a sense of community and care within the church, reflecting the church's commitment to supporting its staff.
For small churches like Tim's, offering catastrophic health insurance can be a viable alternative to traditional health plans. Catastrophic health insurance typically comes with lower premiums, making it more affordable for organizations with limited budgets. However, there are important considerations to keep in mind, the most important being an understanding of what is and is not covered by the insurance companies.
Catastrophic plans provide coverage for major medical emergencies, but they are usually not involved in the day to day primary care activities that people use. That means that they have limited coverage for routine medical costs. Churches must weigh these factors and consider whether the benefits outweigh the challenges. Additionally, an alternative to health insurance like a health sharing plan can be explored. Though it is important to remember that health share plans are not true insurance.
Catastrophic health insurance is designed to provide financial protection against major medical emergencies. Unlike regular health insurance plans, catastrophic plans have lower premiums but provide less coverage for medical expenses. They do this by staying out of your day to day health care costs like primary care and basic lab services. For many Texans who simply do not use a lot of health care services or "never go to the doctor", it has a lot of appeal.
The appeal comes from having the financial backstop if a major health event creates high health costs in a year while being an affordable alternative to high deductible health plans. Tim had always thought that catastrophic health plans came with higher deductibles, but was relieved when we explained that there was a much better option with lower monthly costs. When he discovered that this type of coverage can be administered for small groups of employees, it seemed ideal for churches like his that want to offer some level of protection without the higher costs associated with traditional group health insurance plans.
It is important to note that catastrophic plans do come with limitations. Since they are not involved in primary care, many plans will not offer all of the preventive care that is considered essential coverage by the Affordable Care Act. This can seem like a drawback to some employees if they are a bit older and looking for coverage of those medical expenses. The trade off is usually greatly reduced monthly premiums which allow these individuals to save for those expenses.
The other major drawback comes in the underwriting process where pre-existing conditions are considered. Those medical conditions may prevent coverage being extended or coverage being excluded for them if a policy is offered. This is up to the health insurance company and should be fully vetted when considering this option.
While these health plans don't cover routine medical care, it provides peace of mind for employees knowing they are protected in case of serious health issues. And many Texans find that paying cash for low level primary care services ends up being much more affordable healthcare than shelling out for big premiums due to the administrative costs that come with traditional insurance.
It's important for church employees to understand both the benefits and limitations of catastrophic health plans. These plans can offer significant financial protection in the event of a major medical emergency, helping to prevent financial setbacks for employees. However, they will be paying cash prices for regular healthcare needs. Tim was now understanding that educating staff about these aspects can help manage expectations and ensure they are prepared for out-of-pocket expenses for routine care. By understanding the full scope of what catastrophic plans offer, employees can make informed decisions and appreciate the peace of mind these plans provide.
When comparing catastrophic plans to traditional medical insurance, several differences stand out. Traditional health insurance plans typically have higher premiums but offer more comprehensive coverage, including routine care and preventive services due to the federal requirements in the Affordable Care Act. In contrast, catastrophic plans are more affordable on a monthly basis but require cash out-of-pocket costs for non-emergency care.
Fully insured traditional plans may not be ideal for small employers due to rising health care costs and limited control over medical expenses. On the other hand, self-insured plans, where employers pay only for the claims incurred, offer more transparency and potential cost savings. Self-insured group health plans allow employers to provide high-quality care at potentially a lower cost. However, it is important to remember that these plans are typically fully underwritten and large claims in a given year can produce a non-renewal for small employee group plans.
Since the implementation of the Affordable Care Act, health share plans have grown in popularity. They became a compliant alternative to plans offered through the health insurance marketplace and traditional group health insurance plans. Their appeal was both in the monthly premium savings and in the Christian mission of the organizations. These health care sharing ministries have exploded in number and size as a result. Tim wanted to know how they fit into this discussion.
There are similarities in how these sharing plans work when compared to catastrophic coverage. Neither of these plans are involved in your routine care. You do not have to determine if your favorite family doctor is part of a network of providers to see them. You pay them cash for your visit and do not involve the plan.
The differences come in two ways. The first thing that Tim needed to understand is that a health sharing plan is not actual insurance. It is not regulated in any way by the Texas department of insurance. As a result, if there is a dispute in coverage or reimbursement for medical care expenses, the burden to resolve that issue falls on the employee. Tim did not like that.
The second major difference is that most medical providers do not recognize the health sharing plans for billing purposes. This means that the employee will be required to pay up front for health care services that are provided and be reimbursed for those expenses. That meant that the employees at Tim's church could be out of some huge out-of-pocket amounts for medical services before seeing that money flow back into their pockets. This also gave Tim heart burn.
When we explained that Catastrophic health insurance plans can eliminate these two issues, he began to see a major advantage in trying to help his remaining active employees manage their healthcare costs better. Having real health insurance policies that could provide affordable coverage even if it was a little bit different left him with a idea for a plan.
Insurance For Texans specializes in helping Texas churches protect their future with customized insurance plans. In Tim's case, this customized plan involved health insurance, but he also discovered that it can be for any insurance needs a Texas church has.
Working with an experienced independent insurance agent who understands the unique needs of churches can help them find the best options available. Matching the specific requirements of your church’s employees to the right health insurance plan ensures comprehensive coverage and financial stability. Tim felt like he had a partner in this process.
True Texas Church Insurance is dedicated to looking across the marketplace to find the right coverage for all of your church’s needs. By partnering with us, you can be confident that your church and its employees are well-protected.
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