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Health Care Insurance Options

At Passion for Planting, we believe it’s wise for church planters to have health care coverage for their whole family. It is also now a non-negotiable for the US government: under the Affordable Care Act, everyone must have health insurance or pay fines.

Health insurance is expensive, so how can your new church afford to provide it for the planter and staff? Your church has a couple of options, as articulated here by our own Patrick Bradley.

OPTION A – Cover all full-time employees

The Affordable Care Act allows small employers to opt out of offering health insurance, but it also created a build-you-own-group-plan option for those small employers: the SHOP program. Now your church can offer a group plan with a cafeteria of choices just like major employers do. There are a couple of conditions to make it work, but they’re pretty easy. And there are almost certainly tax subsidies that make the coverage very affordable. To learn more about these options visit: Health Care Options

Within the SHOP program, you can still decide as the employer whether to cover all or a portion of your employee’s costs (for example, you could give employees a $500 credit to the program, then they can pick any plan they want and pay the difference).

Setting up a SHOP group plan is recommended for new churches. If you are utilizing Passion for Planting’s project management services, your project manager may be able to help you with some of the details.

OPTION B – Offer no health insurance whatsoever

As a church, you could decide that it’s either too expensive or too complicated to set up a SHOP program for your employees. If you go this route, all of your staff will be on their own to shop for health insurance. They would probably do this through Affordable Care Act, so the coverage ends up being about the same from the employee’s perspective; it’s just a question of who’s paying for it.

ILLEGAL OPTION C – Offer no insurance but increase salaries

Firstly, employers don’t have the right to tell their employees how to spend their paychecks, so you can’t say, “We’ll increase your salary by $x to cover your health insurance.”

Secondly, the government wants your church to provide health coverage through the health care exchange. Simply increasing an employee’s pay by the amount of the premium (while offering no health plan) will almost certainly be construed by the IRS as an attempt to circumvent the law.

This route also creates all kinds of complicated repercussions, too:

  • Not even an email could be exchanged discussing your intentions to play this game; that would be clear evidence of your intent to evade the law
  • What if your church eventually does want to offer a group plan? You can’t just go and cut everyone’s salary by the amount you were trying to hide in their salary; again, clear evidence
  • What if the law changes and now your church is forced to offer a group plan? same problem

We are in the early days of the Affordable Care Act, so there’s no case law yet where the IRS has come after a church for doing that. But playing this shell game is plainly against the intent of the law, and while this practice is not technically illegal at this point, the law is set up in such a way as to push you towards the Affordable Care Act.


Long term, if you really want to offer your employees health coverage, your best and only practical option is to go through the SHOP health care exchange.

So let your yes be yes (offer a SHOP plan), or your no be no (sorry, we don’t offer health benefits at all).


This content was written while the author was employed by Stadia Church Planting; we are grateful for willingness to help you through this post. To download a PDF version, click here.