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If you live in a state with an individual mandate for health insurance, it’s important to understand how health shares fit into the picture. While health shares can be a great alternative to traditional insurance for many, state-specific requirements may impact your decision. This post will explain everything you need to know if you live in a state that enforces its own mandate.
States with Individual Mandates
As of 2024, the following states enforce individual mandates requiring residents to maintain health coverage that qualifies as Minimum Essential Coverage (MEC) under state law:
- California
- District of Columbia
- Massachusetts
- New Jersey
- Rhode Island
- Vermont
These states may impose penalties on residents who fail to meet their health coverage requirements, even if federal penalties no longer apply under the Affordable Care Act (ACA).
What Are Health Shares?
Health share ministries are organizations where members contribute monthly to help pay each other’s medical bills. These programs often provide affordable alternatives to traditional health insurance. Some health share plans are recognized as ACA-compliant, meaning they meet the federal criteria for exemption from the individual mandate under the ACA.
Examples of ACA-compliant health share ministries include:
- Christian Healthcare Ministries (CHM)
- Medi-Share
- Samaritan Ministries
- Liberty HealthShare
Non-ACA-compliant plans include:
- Sedera
- Zion HealthShare
Do Health Shares Satisfy State Mandates?
The answer depends on your state’s specific requirements. Here’s how it breaks down:
ACA-Compliant Health Shares
- Federal Exemption: These health shares meet federal requirements for ACA compliance, so members are exempt from the federal individual mandate.
- State-Level Compliance: Most states with individual mandates do not recognize health shares, even ACA-compliant ones, as meeting their definition of MEC. For example, California explicitly requires MEC-compliant insurance, and health shares do not qualify.
Non-ACA-Compliant Health Shares
- These plans do not exempt you from either federal or state penalties for not having MEC.
What Are Your Options if You Live in a Mandate State?
If you’re considering a health share and live in a state with an individual mandate, here are your options:
1. Combine a Health Share with a Low-Cost Insurance Plan
To meet the state’s MEC requirement, you can purchase a low-cost catastrophic or bronze-level health insurance plan. This will protect you from penalties and ensure you meet preventive care requirements. Then, you can supplement this with a health share membership for broader cost-sharing benefits.
2. Check for State-Level Exemptions
Some states offer exemptions to the individual mandate for:
- Religious beliefs
- Financial hardship
- Membership in a recognized healthcare sharing ministry
Review your state’s specific exemption criteria to see if you qualify.
3. Accept the State Penalty
If the cost of maintaining MEC coverage outweighs the penalty, you can choose to join a health share and accept the financial penalty. This may still save you money overall, depending on your healthcare needs and costs.
State-by-State Breakdown
California
- Requirement: Residents must maintain MEC-compliant insurance.
- Penalty: Up to 2.5% of household income or a flat fee per adult and child, whichever is higher.
- Solution: Pair a low-cost MEC plan with a health share.
Massachusetts
- Requirement: Residents must maintain “Creditable Coverage.”
- Penalty: Varies based on income and length of non-compliance.
- Solution: Review state-approved plans for options.
Other States
- Check your state’s health insurance website for specific penalties and coverage requirements.
Should You Choose a Health Share Anyway?
Living in a state with an individual mandate doesn’t mean you have to give up on health shares. By understanding your state’s rules and exploring options like low-cost MEC (Minimum Essential Coverage) plans or state-level exemptions, you can still benefit from the unique advantages health shares offer while remaining compliant with the law. Even if health shares don’t satisfy your state’s mandate, they can still be a cost-effective and community-focused way to manage healthcare expenses. Here’s why:
1. Lower Monthly Contributions
One of the most compelling reasons to join a health share is the potential for significant cost savings. Monthly contributions for health shares are often much lower than traditional health insurance premiums, even for comprehensive sharing levels. For families or individuals on a tight budget, this difference can mean thousands of dollars in savings annually.
For example:
- A family of four might pay $500-$700 per month for a health share membership compared to $1,500 or more for traditional health insurance.
- These savings can be redirected toward other essential expenses or healthcare needs, like routine check-ups or dental care.
2. Freedom to Choose Your Own Providers
Unlike traditional health insurance, which often limits you to a network of approved providers, health shares typically allow you to choose any doctor, specialist, or hospital. This flexibility means:
- You aren’t restricted by “in-network” or “out-of-network” limitations.
- You can continue seeing trusted doctors or specialists without worrying about whether they are covered under an insurance plan.
- You have the freedom to seek care from providers that align with your personal preferences or specific needs.
This freedom is especially valuable for individuals who prioritize continuity of care or those living in areas with limited provider options under traditional insurance networks.
3. A Sense of Community and Shared Responsibility
Health shares are built around the concept of members helping each other. Contributions go directly toward paying other members’ medical bills rather than funding a for-profit insurance company. This structure fosters a sense of community and shared purpose, where:
- Members feel connected to others through their shared commitment to helping during medical challenges.
- Contributions support real people, making the process more transparent and personal.
- Many health shares provide opportunities for members to send prayers, notes of encouragement, or other forms of support to those receiving assistance.
For those seeking a more ethical or faith-based approach to managing healthcare costs, this community-oriented model is a refreshing alternative to traditional insurance.
4. Simplicity for Major Medical Expenses
Health shares are designed to simplify the process of managing large, unexpected medical bills. While they typically don’t assist with smaller, routine costs like prescriptions or office visits, their primary strength lies in providing support for significant medical needs, such as:
- Hospitalizations
- Surgeries
- Emergency care
Members are responsible for an Initial Unshareable Amount (IUA) or a similar upfront cost for larger medical expenses. For example, in my family’s case, our IUA is $1,000. This means if we encounter a major, unexpected medical expense (that’s not pre-existing), we pay the first $1,000, and the health share community takes care of the rest.
This straightforward approach offers peace of mind by focusing on substantial medical needs and ensuring that once the IUA is paid, eligible expenses are shared by the health share community, providing a reliable safety net without the complexities of traditional insurance deductibles and co-pays.
Additional Benefits
Health shares may also offer the following advantages, depending on the program:
- Transparency: Members often know exactly where their money goes, fostering trust and accountability.
- Preventive Care Discounts: While not typically included in sharing, some health shares provide access to discounted preventative care services or prescription discount programs.
- Tailored Plans: Many health shares allow you to select a contribution level that fits your budget and anticipated healthcare needs.
Final Thoughts
Navigating healthcare options can feel overwhelming, especially when juggling state mandates and personal preferences. If you’re exploring health shares as an alternative, don’t let state requirements discourage you. With a little planning—like pairing a low-cost insurance plan with a health share or researching exemptions—you can still take advantage of the affordability, flexibility, and community-focused benefits that health shares provide.
At the end of the day, it’s about finding what works best for your family’s health and financial well-being. Whether it’s the freedom to choose your doctor, the simplicity of sharing major medical expenses, or the satisfaction of being part of a supportive community, health shares might be the solution you didn’t know you were looking for.
If you have questions or want to learn more, feel free to reach out. I’m here to help you make the best decision for your situation.
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