Health Care Sharing Ministries (HCSMs) are not Minimum Essential Coverage (MEC), so they do not qualify an employee for QSEHRA participation, but monthly membership fees may be reimbursed tax-free only if the employee also has a separate MEC plan.
If no MEC plan is in place, QSEHRA reimbursements are not tax-free.
Do health care sharing ministries qualify for QSEHRA reimbursement?
Health Care Sharing Ministries (such as Medi-Share, Samaritan Ministries, or Christian Healthcare Ministries) are not considered insurance under the Affordable Care Act and do not meet Minimum Essential Coverage (MEC) requirements.
Because of this:
They do not qualify as standalone coverage for QSEHRA eligibility
They cannot be the only health coverage used for tax-free reimbursement
Can HCSM membership fees be reimbursed?
Yes, but only under specific conditions.
HCSM monthly membership fees may be reimbursed through a QSEHRA if:
The employee also has a separate MEC-compliant health insurance plan, and
The employee is otherwise eligible for QSEHRA participation
In this case:
The HCSM monthly “share” can be treated as a qualified medical expense under IRS Section 213(d)
The reimbursement may be tax-free when MEC requirements are met
What is required for QSEHRA eligibility?
To receive tax-free QSEHRA reimbursements, an employee must have:
Minimum Essential Coverage (MEC)
Examples include:Marketplace health insurance plans
Employer-sponsored group plans
COBRA coverage
Medicare or Medicaid (eligible types)
If MEC is not maintained:
QSEHRA reimbursements may become taxable income
What happens if I only have a health care sharing ministry plan?
If an employee only has an HCSM plan:
They do not meet MEC requirements
They are not eligible for tax-free QSEHRA reimbursements
Any reimbursements (if allowed by employer plan design) would generally be treated as taxable income
In most cases, employers require MEC before any reimbursement is approved.
Can both MEC and HCSM plans be used together?
Yes.
If an employee has:
A MEC-compliant health insurance plan (required), and
A Health Care Sharing Ministry plan
Then:
The MEC plan satisfies eligibility requirements
The HCSM membership may be eligible for reimbursement depending on employer plan design
Why MEC matters for tax-free treatment
QSEHRA is designed to reimburse employees tax-free only when MEC is maintained.
Without MEC:
The IRS does not consider the employee “covered” for QSEHRA purposes
Reimbursements may become taxable
Compliance risk increases for the employer