Churches · Ministries · Nonprofits
Health benefits for Michigan churches & nonprofits
Church-plan rules, clergy taxes, sharing ministries and tight grant budgets make benefits different for mission-driven employers. We walk through the options with you.
Your info goes to one licensed Michigan advisor, never sold. Not to a call center, not to a list of “partners.”
- Church-plan questions
- ICHRA & QSEHRA
- Fixed budgets
Talk to a benefits advisor
Your info goes to one licensed Michigan advisor at Nexus. Never sold. No pitch, no obligation.
Churches: what’s different
- Church-plan status. Plans established and maintained by a church can be “church plans” that are exempt from ERISA. Status depends on the facts and documents, so confirm it with counsel rather than assume. [ERISA §3(33); IRC §414(e)]
- Federal COBRA. It doesn’t apply to plans sponsored by churches and certain church-related organizations. [U.S. DOL employer COBRA guide]
- The ACA still applies. ERISA-exempt doesn’t mean ACA-exempt. A church with 50+ full-time equivalents, counting schools and affiliated ministries as the rules require, faces the employer mandate.
- Clergy taxes. Ministers are generally employees for income tax but self-employed for Social Security and Medicare on ministry earnings, which affects how premiums and reimbursements are handled. [IRS Pub. 517]
The health care sharing question
Many church staff use health care sharing ministries. They aren’t health insurance, so they don’t count as the individual coverage an ICHRA requires. Staff who stay in a sharing ministry can’t use an ICHRA allowance. Raise this early; it’s a pastoral conversation as much as an HR one. [HealthCare.gov CHOICE Arrangement requirements]
Request a benefits reviewYour options, side by side
Group or denominational plan
One plan for all staff. Strong when the plan is competitive and staff are satisfied. Watch participation rules for small offices.
ICHRA
A set allowance, no participation minimum, and different amounts for full-time and part-time classes. Works well for organizations starting from zero. How ICHRA works in Michigan.
QSEHRA
Simple and capped, for organizations under 50 full-time employees with no group plan. QSEHRA rules.
Before choosing, we check whether an employer offer would cost lower-paid staff a Marketplace tax credit worth more than the benefit. For 2027 an offer is “affordable” at 10.22% of income, and an affordable offer ends credit eligibility. [IRS Rev. Proc. 2026-26]
Nonprofits: fixed budgets, grant cycles
- Predictable cost. An ICHRA or QSEHRA allowance is a known monthly number you can put in a grant budget.
- Classes that match your staff. ICHRA classes include full-time, part-time, seasonal, salaried and hourly; you can’t invent a “grant-funded” class, but those roles often fall into a permitted one. [HealthCare.gov]
- Turnover. With an individual plan, a departing employee keeps their own coverage.
- Small staff, no plan today? Compare an ICHRA, a QSEHRA and a small-group plan for your actual census.
Sick time applies to churches and nonprofits too
Michigan’s Earned Sick Time Act covers every employer with one or more employees; LEO notes volunteers are generally not employees in certain circumstances. Paid staff in “volunteer” roles may count. [LEO ESTA FAQ] See our ESTA employer guide.
Deeper reading from our Advisor’s Edge: health insurance options for churches, ICHRA for churches and the ERISA exemption, ERISA exemptions for church plans, ICHRA for Michigan nonprofits, and our churches & nonprofits page. General information, not legal advice.
2-minute advisor Q&A
Benefits for churches and nonprofits
A Nexus advisor answers the questions we hear most. (Video coming soon.)
- Does our church have to offer COBRA?
- Can staff in a sharing ministry use an ICHRA?
- What fits a small nonprofit budget?
Frequently asked questions
Do churches have to offer COBRA?
Federal COBRA doesn't apply to plans sponsored by churches and certain church-related organizations, according to the U.S. Department of Labor. Other continuation rules can still matter, so confirm with counsel.
Can a church offer an ICHRA?
Yes. A church can offer an ICHRA, but ACA rules, IRS reimbursement rules and the 90-day notice still apply, and employees must have individual health insurance. Health care sharing ministries don't count.
Does the ACA employer mandate apply to churches and nonprofits?
Yes, if the organization has 50 or more full-time-equivalent employees. ERISA exemptions don't remove ACA employer obligations.
What's the best health benefit for a small nonprofit with no plan today?
It depends on staff income, ages and where they live. An ICHRA or QSEHRA gives a fixed budget with no participation minimum; a small-group plan gives one shared network. We compare them for your census, including whether an offer would cost staff a tax credit.
Does Michigan's sick time law apply to churches?
Yes. LEO says the Earned Sick Time Act covers all Michigan employers with one or more employees. Volunteers are generally not employees in certain circumstances, but paid staff are.
Will you sell my information?
No. It goes to one licensed Michigan advisor at Nexus and is never sold.
Where are you on the benefits ladder?
Keep exploring
Small-business pages by region
- Grand Rapids · Kent & Ottawa
- Detroit metro · Wayne, Oakland & Macomb
- Lansing · Ingham, Eaton & Clinton
- Ann Arbor · Washtenaw
Buying coverage for yourself or your family? See Michigan Open Enrollment 2027.