I was recently contacted by a provider association because some of their members have been hearing from patients whose insurance doesn’t include key consumer protections in the Affordable Care Act (ACA). In this particular case, the doctors’ offices were being told that the patients were enrolled in a “church plan” that didn’t need to cover immunizations, children’s well visits or other preventive benefits required by the ACA. While church plans and religiously affiliated employers have protested the ACA’s contraceptive coverage requirements, immunizations, cancer screenings and childhood physicals are less controversial. Yet providers are reporting increasing numbers of patients with this kind of insurance. How can this be? The association rep asked me.

There could actually be two different kinds of religiously affiliated coverages at play here. One type is “church plan” coverage and the other comes from “health sharing ministries,” which my colleagues and I have already blogged about here and here. They are different creatures, with different regulatory structures. Unfortunately, the effect for consumers could be pretty much the same – an inability to get the protections promised under the ACA.

What is a church plan?

A church plan is defined in federal law as a plan “established and maintained…for its employees (or their beneficiaries) by a church or by a convention or association of churches.” Federal interpretation of this provision has also allowed some service organizations sponsored by churches, such as hospitals or other charities, to also fall within this definition.

While church plans have long been exempted from the Employee Retirement Income Security Act (ERISA), they have not been exempted from the consumer protections in the ACA that would otherwise apply to employers. This is because church plans are not exempt from the internal revenue code (the Code), and the ACA provisions incorporated into the Code that apply to group plans, including the requirement to cover preventive services without cost-sharing, do apply to church plans. However, church plans are exempted from the $100 per day per violation excise tax, along with reporting and disclosure requirements that typically apply to other employer group plans, and the Department of the Treasury has no regulatory infrastructure to receive complaints, collect plan descriptions, or monitor potential violations. So if the plan is violating the ACA’s requirements to cover preventive services, there is no clear mechanism to hold it accountable.

What is a health care sharing ministry (HCSM)?

Under federal law, HCSMs are non-profits with members who “share a common set of ethical religious beliefs and share medical expenses among members in accordance with those beliefs.” A majority of states do not consider HCSMs to be issuers of insurance products, and exempt them from consumer protections in their state insurance codes. Because they fall outside of insurance regulation, they are also not subject to the consumer protections in the ACA. In fact, according to one HCSM official with whom I’ve spoken, his organization doesn’t cover any primary or preventive care at all.

The Affordable Care Act further exempts members of bona fide HCSMs from the individual responsibility requirement. To guard against fraud, the statute requires that members must be enrolled in an HCSM that has been in existence “at all times” since December 31, 1999, medical expenses among members must have been shared “without interruption” since at least that date, and the ministry must conduct an annual audit. HCSMs have experienced a rapid growth in membership since the ACA was enacted, but as we’ve previously noted on CHIRblog, it’s very much “buyer beware” with this form of coverage since there is almost no independent government oversight of how care is financed and paid.

The bottom line for my friend at the provider association? If they want to get paid, their physician members who have patients enrolled in church plans or HCSMs may want to ask for payment up front.