AHCSM is dedicated to the preservation, advancement and promotion of Health Care Sharing (HCS) and the underlying First Amendment constitutional freedoms of liberty of conscience; the free exercise of religious expression, faith and practice; and the freedom of speech and assembly. The Alliance supports member and affiliate HCS ministries and their participants by monitoring federal legislative and regulatory activity and quickly acting on all pertinent to HCS. The AHCSM monitors federal legislation and regulation in the following areas: banking and commerce, insurance, labor, pro-family and pro-life issues, religious liberty, and tax issues. The AHCSM also is focused on the study of HCS ministries, practices, as well as its benefits and success.
- Americans have the right to participate in HCS and should be free from intrusive and burdensome government control.
- Families and individuals choosing to participate in HCS should not be discriminated against by the government, medical practitioners, health care systems, etc.
- HCSMs are non-profit, charitable organizations or religious ministries that do not provide healthcare to their participants. They are not insurance entities. Instead they act as a clearinghouse for those who have medical expenses and those who desire to share the burden of those medical expenses. HCSMs should not be governed or regulated as insurance, but as charities.
- Government Healthcare policy should have a balanced approach to legislation, regulation and oversight that equally advances private charitable endeavors, for-profit corporate entities and where necessary government entities.
- HCS should have parity with other health care solutions with respect to the federal tax code.
Health Care Sharing Ministries (HCSMs) engage in voluntary sharing and not a contractual transfer of risk; they are not insurance. The regulatory requirements of insurance, if imposed on HCSMs, would destroy the voluntary, ministerial nature of the organizations. HCSMs are under the oversight and general regulation of both the Internal Revenue Service and the states’ attorneys general since they are 501(c)(3) charities.
From 1994 to 2016, legislation has been passed in 30 states recognizing that HCSMs are not insurers under the state’s insurance code. (AK, AL, AR, AZ, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MO, MS, NC, NE, NH, OK, PA, SD, TX, UT, VA, WA, WI, and WY).
In light of the fact the HCSMs are relatively unknown, states, as well as federal tax codes, do not expressly address the status of such arrangements. Under the federal Internal Revenue Code, employers who purchase health insurance for their employees may deduct the cost as a business expense, while at the same time it is a nontaxable fringe benefit to the employee. The self-employed and employees who purchase their own health insurance may, in most circumstances, also deduct that cost on their income tax returns. Also, health insurance reimbursements for medical expenses are not considered taxable income.
Like health insurance policyholders, members of HCSMs make payments that go toward assisting fellow members with medical expenses. However, due to the fact that HCSMs are not insurance companies and are not well known, the federal and state tax codes do not explicitly address their status.
In 2007, Missouri became the first state to amend its income tax code to allow a full personal deduction of HCSM expenses. (See Section 143.118.1 RSM.) This legislation is designed so that HCSMs are given at least equal treatment with health insurance.
In 2017, legislation similar to Missouri was introduced in North Carolina. NC House Bill 295 would clarify that taxpayers are entitled to an itemizied deduction in calculating their adjusted gross income for amounts paid toward the health care expenses of HCSM’s members, as well as the HCSM’s administrative expenses, so deductible just like medical and dental expenses.