Participation in a QSEHRA, for example, is not essential to have health insurance. Workers can utilize their HRA allowance to cover out-of-pocket expenses such as prescription pharmaceuticals, counseling, over-the-counter medication, and other items.
If you’re weighing the two options and looking for a more comprehensive healthcare option with more freedom and fewer restrictions for your employees, an HRA may be the way to go. Your employees will have more influence over their healthcare decisions, and you will have a tax-free and cost-effective alternative to your company’s typical health insurance plan.
Can a health stipend be used in conjunction with healthcare sharing ministries?
While membership fees for healthcare sharing ministries cannot be reimbursed through an HRA, they can be reimbursed through a health stipend. Because a health stipend is not a recognized health benefit, there are fewer constraints on how it can be used.
A health stipend functions in the same way as an HRA does. Workers submit reimbursement claims for medical expenses, and their employers compensate them up to the amount of their monthly allowance. Health stipends, on the other hand, are taxable and must be reported as income on an employee’s W-2.
Employers can use health stipends to compensate employees for health, dental, and vision insurance premiums, chiropractic care, medical services such as office visits and medications, healthcare sharing membership fees, and other expenses.
While most health stipend expense reimbursements do not require proof of purchase, an employer may request proof of purchase for healthcare sharing ministries membership fees. A healthcare sharing ministry is not subject to HIPAA requirements because it is not a formal group health plan under IRS Publication 502.
When you submit a receipt for your membership fees, your employer might approve or reject the charge. When you are authorized, your company reimburses you up to your monthly allowance. Although some administrators may process a separate payment, most employers repay employees through payroll.
If you’re unfamiliar with healthcare sharing, it’s fair to be wary. Yet, it is still relatively popular, with over 1.5 million people taking use of the benefit. Healthcare sharing can be a viable alternative to traditional health insurance, but it is not without limitations.
You should look over the Medishare membership requirements to see if the terms are acceptable to you. Failing to abide by these terms may result in a denied application or cancellation of membership.