What is a self-funded health plan for ministries?

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A man sits at a desk with a laptop and paper to evaluate a self-funded health plan.

Is your ministry exploring a self-funded health plan as an alternative to traditional health coverage? Perhaps you’ve heard that it could cut costs and provide exemptions from certain Affordable Care Act (ACA) provisions. GuideStone® encourages ministries to carefully evaluate the risks and rewards before making a decision that carries an extensive impact.

Exactly what is a self-funded health plan? And what are the pros and cons? To navigate these questions, explore our white paper, The Role of Self-Funded Health Plans in Ministry Health Coverage. Here are some highlights you’ll find.

What is a self-funded plan?

A self-funded health plan is a type of health coverage in which the employer assumes responsibility for paying employee claims for health care expenses rather than paying those costs through premiums paid to a private insurer.

Which responsibilities come with a self-funded health plan?

Employers that establish a self-funded health plan accept responsibilities for all aspects of the employee health plan, including:

  1. Funding
  2. Administration
  3. IRS reporting
  4. Claims management
  5. Establishing a medical network

When considering the responsibilities required for self-funding, you may want to ask:

  1. Does my ministry have enough staff to take on the required responsibilities?
  2. Does my staff have the background and knowledge necessary to carry out the responsibilities?
The Risk of Catastrophic Claims

If a self-funded employer encounters catastrophic claims or an excessive number of claims, the reserves may not be enough to cover them. Many self-funded employers purchase stop-loss insurance to protect against claims exceeding their reserves.

A Biblically Based Church Plan, Minus the Risk to Your Ministry

GuideStone is committed to offering budget-friendly, quality health coverage in alignment with biblical values. As ministries of all sizes band together under GuideStone’s plan, they can enjoy the benefits of self-funding without putting their organizations in financial jeopardy.

Because the GuideStone plan pays the claims, the ministry does not need to purchase stop-loss coverage. The risk of catastrophic claims is calculated into the rates and distributed across all employers.

Comparison of Self-funded Plans and GuideStone Church Plans
Self-funded Health Plans GuideStone Church Plans
Financial risk Employer assumes the risk GuideStone assumes the risk
Risk is based on Only the ministry's employees Multiple ministries of all sizes, which helps spread out the risk
Responsible for plan administration and claims management Employer (could contract out to a third-party payer) GuideStone
Responsible for funding for claims payment Employer (may require hiring experts, like an actuary and investment advisor) GuideStone
Responsible for IRS reporting Employer GuideStone
Responsible for creating a medical network Employer GuideStone

 

Which health plan is right for your ministry?

We understand that you are searching for ways to provide quality benefits while being a good steward of your ministry’s budget. Choosing a group health plan is an important decision that has far-reaching financial repercussions for your ministry and employees. For more information on the benefits of GuideStone health plans, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.


GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice.