The Affordable Care Act (commonly called Obamacare) requires all Americans to obtain minimally adequate health insurance for themselves and their dependents or be subject to a tax penalty, called a shared responsibility payment. For 2014, the penalty is the greater of $95 or 1% of adjusted gross income; but the penalty goes up in future years. However, several categories of people are exempt from Obamacare’s individual insurance mandate. One of the least known, but most interesting, exemption from the mandate is for health care sharing ministries.
Health care sharing ministries have been around for decades. They are tax-exempt nonprofit religious organizations made up of members with common religious beliefs. One of them was established by the Old Order Amish. Others have been formed by evangelical Christians. For example, one of the largest such ministries, Medi-Share, states that members must “believe the biblical doctrines that their bodies are temples of the Holy Sprit and therefore are to be kept pure…must not engage in sex outside of traditional Christian marriage,” and “cannot use tobacco or illegal drugs in any form.”
A health care sharing ministry is not the same as health insurance—instead, it is a form of cost sharing. The names and medical and financial needs of ministry members are published in a monthly newsletter. Members typically pay a monthly fee (also called a “share”) directly to other members whose needs are listed in the newsletter. They also agree to send cards and letters and pray for ill fellow members. According to the Alliance for Health Care Sharing Ministries, participants share more than $180 million per year for each other’s medical expenses. However, because a health care sharing ministry is not health insurance, members are not guaranteed any benefits.
Moreover, ordinarily, no financial help is provided for medical conditions arising from conduct outside the religious or behavioral guidelines established by the ministry. For example, typically no financial help is provided to help pay for abortions or the “morning after” birth control pill.
Twenty-five states have passed laws officially recognizing that health care sharing ministries are not insurance and exempting them from their insurance laws. A health care sharing ministry is also exempt from the consumer and patient protection requirements of the Affordable Care Act provided that:
- it has been in operation continuously since December 31, 1999
- is a 501(c)(3) (tax-exempt) organization
- its members share common ethical or religious beliefs
- it does not discriminate among its members based on state of residence or employment
- its members cannot lose membership due to development of a medical condition, and
- it is subject to an annual audit by an independent CPA and the audit is publicly available upon request.
There are only three nationwide health care sharing ministries that meet these requirments and qualify to be exempt under the Affordable Care Act: Samaritan Ministries, Christian Healthcare Ministries, and Medi-Share. Members of these minsitries are exempt from the Obamacare individual mandate. This means they need not obtain traditional health insurance.
Health care sharing ministries serve more than 210,000 people, with participating households in all fifty states. More information about them can be found at the Alliance of Health Care Sharing Ministries at www.healthcaresharing.org/hcsm/.