The following post comes from Gary Skeen, president of CBF’s Church Benefits Board, as part of a blog series related to health care changes due to the Affordable Care Act. Read part 1, part 2 and part 3.

Today we want to approach the last major area of the new healthcare reform law – the Small Business Health Options Plan (SHOP), or SHOP exchange marketplace.  I think over time, these exchanges have the potential to be a major source of medical coverage for church staff and employees. There has been some misinformation about the SHOP plans and some of the implementation features have been delayed until 2015, but this is still an area churches should investigate.

Historically, many churches used to provide medical insurance for ministerial staff and full time employees. In recent years, many decided that the restrictions and cost made it too difficult to find coverage.

In the open market, a small employer plan would be rated based upon the individual small group. For churches, that meant anyone with a staff member or dependent with a chronic medical condition or a higher average staff age (which most did) would either be denied coverage or result in very high rates.

At small churches, with as few as three or four employees, most plans required 70 percent of employees to participate. If one member balked at the high plan rates, or decided that being covered by a spouse made more sense for them, it resulted in small churches being unable to participate in health plans.

The SHOP marketplace is designed to help with this problem and enable small employers to provide coverage.  Since preexisting health conditions are no longer a factor in the individual group rating and the age factoring is limited to no more than 3 times the youngest age rate, many small groups will now be able to find coverage.

There is still a 70 percent participation requirement, but it will be waived during open enrollment from November 15 to December 15 each year.  They will also not count folks with access to coverage through another plan in the 70 percent, thus eliminating many of the reasons churches could not find coverage in the small group market.

The new exchange does require your church (employer) to offer coverage to all full time (over 30 hours) employees.  This may impact some churches who have only offered coverage to ministerial staff in the past. Remember the goal of the legislation is to allow more people access to medical coverage.

This is where I would normally launch into my speech about keeping in mind we have a responsibility to all staff – not just ministers, but we will save that for another time.

With most of the barriers removed for small group plans, the market place now provides a way for your church to continue providing medical insurance coverage to your staff.  It continues to allow providing medical coverage as a pretax benefit, for the good stewardship of compensation funds. The SHOP marketplace allows the employer (church) to set its contribution level toward the premium cost, so employees can then compare the employer option with coverage available to them individually through the exchange.

For 2014, employers select the level of contribution and a single-plan offering. Coming in 2015, the employer will have the ability to identify their level of contribution and then employees will be able to select from various coverage and plan options.

Since my basic premise is that employers (churches) ought to be involved and concerned about the level and quality of medical coverage available to their staff, I am hopeful that the SHOP marketplace will become a viable solution for churches.

In the next blog we will begin to talk about the discernment process to work through all the options we have been talking about over the last few blogs.

In the meantime, before October 1,, please provide your church staff with a new required disclosure about the Healthcare Exchanges. See our web page link to the sample forms.

There are those that would debate if this is required of churches, but it is healthy to be sure employees know about their options and there seems no downside to compliance. (It might spark a good health care discussion among staff that would be worthwhile. If you are willing, a discussion about health care as it pertains to investing in employees and shared values might frame the topic differently than it is being portrayed in the mainstream media.)

If you have any questions, or would like to be added to our subscriber list on Health Care Updates, please email us at churchbenefits@churchbenefits.org .

My job at Church Benefits Board is to keep you informed about what’s coming and help you to navigate the process. Your benefits are our ministry. If I can ever be of assistance, the CBB staff is ready to help. Call us at 1-800-352-8741.