Can a church employer require all church staff over 65 years of age to leave the medical insurance plan for the purpose of reducing the cost of insurance for the younger pool of workers? We're offered cash reimbursement for Plan D drug expenses in exchange.

Insurance is a matter of state law, each state have their own rules, In many companies, it is common for many insurance benefits to have a max age, an example my life insurance stops at age 70 and my disability stops at age 65.
In my case my health care also stops at 65.

It should be written into the insurance plan rules and regs, normally the company does not have the choice, but the plan itself will only cover to a spectific age.

Also if the person does not sign up and take their medicare, after the enrollment period their benefits will start be to less when they do sign up. So if they wait too long to sign up, they will have a much less policy than if they take it now.