Health Care Sharing Ministries
These have been in existence for decades, but recently received additional attention due to provisions of the Affordable Care Act indicating that purchasers of health care sharing ministries would be exempt from the federal insurance mandate and not subject to the "tax" typically imposed on those that elect to go without health insurance.
"This exemption excludes members of a health care sharing ministry, meaning an organization:
(I) which is described in section 501(c)(3) and is exempt from taxation under section 501(a),
(II) members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed,
(III) members of which retain membership even after they develop a medical condition,
(IV) which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999, and
(V) which conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public upon request.
26 U.S.C. § 5000A(d)(2)(B). 26 U.S.C. § 501 provides tax exemptions for certain organizations."
Here are some resources discussing the legality of these entities:
- Galarneau, C. Health Care Sharing Ministries and Their Exemption From the Individual Mandate of the Affordable Care Act, J Bioeth Inq. 2015 Jun;12(2):269-82. PMID: 25672616.
- Liberty University, Inc. v. Geithner, 753 F. Supp. 2d 611 - Dist. Court, WD Virginia 2010
- Roane, D. Religious Exemptions From the Health Care Individual Mandate, Journal of Accountancy, 2014
More information is also available from the Alliance of Health Care Sharing Ministries.
Here are the five Health Care Sharing Ministries in existence that allow one to avoid ACA fines (remember that per the ACA new ministries formed from the year 2000 going forward would be at a severe disadvantage, since their products would not allow members to avoid the health insurance penalty):
- Altrua Healthshare (their tax status is less clear than the others, but they do have this letter from CMS)
- Christian Healthcare Ministries
- Liberty HealthShare (commonly, but not exclusively, sold under the branded product Liberty Direct)
- Medi-Share (Christian Care Ministry)
- Samaritan Ministries
Remember that this is not the only insurance exception under the ACA
Under the ACA, the term "individual" excludes those who qualify for a religious conscience exemption under § 1311(d)(4)(H), are members of a health care sharing ministry, or are incarcerated. 26 U.S.C. § 5000A(d). In addition, § 1501 exempts from its penalty provision those individuals for whom the annual cost of the required coverage exceeds eight percent of their household income, individuals whose household income falls below the poverty line, members of Indian tribes, and individuals deemed to have suffered a hardship with respect to their capability to obtain coverage. Id. § 5000A(e).