Small churches in Texas are currently getting beat up financially. The cost of church insurance coverage is exploding if you can find it. And good luck obtaining affordable health insurance that actually covers things. It seems like the health insurance coverage continues to deteriorate while the premium costs go up.
Pastor Eric is the leader of a small congregation in Weatherford facing a challenging situation. He is deeply concerned about his staff's ability to obtain health insurance. With only a couple of employees, they have been told repeatedly that obtaining a group health plan was impossible. Eric knew that without health insurance, his dedicated team would be vulnerable to unforeseen medical costs. The individual health plans that they had looked at had tiny networks that they would be required to stay inside of for their healthcare costs to be covered.
The church leaders had told Eric he needed to find a solution that balanced comprehensive coverage with their tight budget constraints. How could a small church like his provide health insurance for its employees? It had become painfully obvious that traditional insurance options from the big insurance companies do not appear to be working. What could be done?
Overview Of Health Insurance For Small Texas Churches
Health insurance for small Texas churches can be a complex landscape to navigate. Churches with fewer than 50 employees are not mandated to provide health insurance under the Affordable Care Act. However, offering health benefits can significantly enhance recruitment and retention, promote employee well-being, and positively impact the church's community and mission. Most Texas churches understand that providing some form of health insurance benefits is wildly important. The problem is finding a coverage plan that works for both the church budget and the user of the the plan. This is the crux of Eric's problem.
It is easy to understand that providing health insurance for church employees is a key for fostering a supportive and secure work environment. But did you realize that health insurance options for churches can include traditional group health plans, individual health plans, and alternative health plan solutions like catastrophic health insurance or health sharing ministries. Any of these care plans can offer peace of mind to both the religious organization and its staff by making sure that employees can access necessary medical care without massive financial damages.
Understanding Health Insurance Options
Eric was now beginning to grasp that there are several health insurance options available for his small church. But he needed a concise summary of each to take back to the elders and finance committee. We attempted to distill down what the adequate coverage options were for his small church.
- Group Health Insurance: While challenging for very small churches, this option pools resources to provide coverage. There are options for groups with two to five employees, but they can tend to be very expensive unless everyone is young and healthy.
- Individual Health Insurance: Employees can purchase their plans, often with subsidies through the federal marketplace. The downside of these plans is that networks in Texas tend to be limited and the out of pocket medical costs tend to be very high.
- Health Sharing Ministries: These are faith-based alternatives where members share medical expenses. They can be a cost-effective solution, but it is important to remember that these are not true health insurance plans and therefore are not regulated by the Texas Department of Insurance.
- Catastrophic Health Coverage: Most people think of these as high-deductible plans designed for emergencies. While sometimes true, there are also lower deductible plans offered by private insurers that focus only on major events and have the insured pay for primary care activities out of pocket. These plans tend to have a much lower premium cost.
Each option has its benefits and considerations, and churches should evaluate which best meets their needs. Eric was now feeling better about his ability to secure essential coverage that would allow his team to better control healthcare costs while also not being a burden on the church's budget.
Traditional Group Health Insurance vs. Individual Health Insurance Plans
Traditional group health insurance typically offers comprehensive coverage but requires a minimum number of participants. That minimum number often being five makes it less feasible for small churches, though there are some options that will go down to two participants. Eric had experienced this first hand. It is also important to understand that churches have a special consideration as they are typically ERISA exempt which makes finding traditional insurance a problem in this space.
Individual health insurance plans provide more flexibility and can be tailored to each employee's needs, but they may come with higher out-of-pocket costs. Eric was intrigued by these plans as they opened up different insurance carriers making offers, including the catastrophic options. Most churches leveraging these options can find it more cost effective to increase pay to cover some or all of these costs than being responsible for at least 50% of a group plan.
What To Consider When Looking At Alternative Health Insurance Options
Now that Eric had a lay of the options available of health insurance to churches, he wanted to nail down the key items to consider when making a recommendation to his church elders. When evaluating alternative health insurance packages, we gave Eric a short list of things to focus on.
- The specific health needs of their staff.
- The cost of premiums and out-of-pocket expenses.
- Coverage limitations, such as exclusions for pre-existing conditions in some individual plans and network restrictions with HMO plans.
- The stability and reliability of health sharing ministries. Some have gone insolvent or not paid what should be approved health care costs.
By weighing these factors, churches can find viable solutions that offer adequate protection without breaking the budget. But most of all, you need to make sure that whatever you choose it is usable healthcare coverage for your enrolled employees.
Other Key Items To Focus On
Choosing the right plan involves balancing comprehensive coverage with affordability. Many Texans are fixated on deductible amounts for their chosen plans. We understand that this was traditionally a quick and dirty method of determining the most budget friendly plan. As the major health insurance providers have begun to shift more cost over to the insured's responsibility, the out of pocket costs paid after deductibles have been met has grown. This means that the total cost of risk for healthcare has grown substantially.
Out Of Pocket Costs
Out-of-pocket costs have traditionally been thought of as deductibles and copayments. This meant that your expenses were capped by those. Now you have to worry about coinsurance and non-covered services which can significantly impact the affordability of health insurance plans. It's important to consider the maximum out-of-pocket amount, as this represents the total financial risk for a given year. Churches should aim to minimize these costs while ensuring sufficient coverage. But reducing these maximum amounts tends to raise premiums substantially.
Options To Reduce Out Of Pocket Costs For Consideration
There are strategies available to reduce out-of-pocket costs that do not include lowering the max out of pocket on a chose plan. Churches can offer indemnity plans and/or additional low-cost coverage like critical illness and accident policies. These plans typically pay cash when a specified event occurs that can be used to cover up those unexpected costs. These plan can offset major expenses and provide financial relief in emergencies. The good news is that they can be less expensive than lower the max out of pocket on the base plan. By implementing these types of measures, churches can provide adequate protection for their employees without straining their budgets.
Costs and Premiums
Health insurance premiums are influenced by factors such as age, location, tobacco use, pre-existing conditions, network type, and coverage type. When a plan is fully underwritten all of these come into play. The more flexibility around any of these items will see premiums rise. This is true whether the chose plan is an employer-funded plan or an individual health plan.
One important item on individual health insurance policies is the premium tax credits based on income limits and eligibility through the federal marketplace. These cost offsets can help make individual plans more affordable when all of the factors are done correctly. Understanding these factors can aid churches in selecting cost-effective health insurance options.
Health Insurance Premiums For Small Churches On Tight Budgets
For small churches with tight budgets, the high cost of health insurance premiums can be a significant financial challenge. Finding affordable options and employing strategic budgeting measures are essential. Churches should explore all available resources to ensure they provide necessary health benefits without compromising their financial stability. Working with a local independent agent who understands the Texas health insurance marketplace and the unique challenges that small Texas churches face will allow you to find the best coverage for your church.
Working With Insurance For Texans To Get Coverage
Insurance For Texans specializes in helping Texas churches protect their future with customized insurance plans. Working with an experienced independent insurance agent who understands church-specific needs allows for the best coverage options. True Texas Church Insurance helps churches of all size navigate the marketplace to find the right health insurance solutions tailored to each church's unique requirements.
Click the button below to explore health insurance solutions for your small church with True Texas Church Insurance. Let us help you find the right coverage for your dedicated employees.