Find out about Health Care Sharing Ministries (HCSM), and related exemptions under ObamaCare.
FACT: If your Health Care Sharing Ministry qualifies then you are exempt from the fee. Members of health care sharing ministries demonstrate their exemption by using IRS Form 8965 when filing their 1040 tax return.
What are Health Care Sharing Ministries (HCSM)?
Health Care Sharing Ministries (HCSM) have been available as non-profit alternatives to purchasing health insurance from private for profit insurers for many years.
HCSM, generally, are organizations whose members share a common belief system and collectively “share” the cost of its members medical care.
HealthCare Sharing Ministry Pros and Cons
It’s important to understand that Health Care Sharing Ministries have specific rules based on the beliefs of their members. While often the groups are cost effective and provide a viable alternative to some, entering a group should not be taken lightly. Beyond not needing to provide all the benefits, rights, and protections of the Affordable Care Act one should expect rules such as:
- Not being able to use tobacco or illegal drugs
- You must drink lightly or not at all
- Not being able to have sex outside of a traditional Christian Marriage
- Not being allowed to use contraception
- You must attend church regularly
- Claims are paid by group members. Members can simply not pay your claim if they don’t want to.
Is Health Care Sharing Ministry Coverage Minimum Essential Coverage?
Health Care Sharing Ministry coverage is not considered Health Insurance or minimal essential coverage and, thus, is not required to offer the same actuarial values or rights, benefits, and protections provided by the ACA.
However, the ACA does provide an exemption from paying the fee to those who chose this option, and HCSMs have seen a boom in memberships as a result.
How HCSM Work
Typically, in Health Care Sharing Ministries (HCSM) everyone pays for small out-of-pocket costs on their own. When a bigger claim is needed to be paid you write the ministry, they contact the members, and you get prayers and monetary gifts to help you pay for your claim.
This money comes in part from members as needed and in-part from monthly deposits in a group account from members.
HCSM do not have networks and are not limited to specific states or regions. They simply pay for a specified amount or percentage of the cost of health care services accrued by its members from an escrow account that all the members pay into. That is, as long as those services are not in conflict with the shared belief system on which the organization was founded.
For individuals or families who saw a large increase in premium costs or who, for personal reasons, do not want to participate in the ACA, this may be a viable alternative to purchasing minimal essential coverage.
ADVICE: HCSM are not considered minimal essential coverage and are not required to provide the same medical coverage as other plans. Look very closely at the guidelines for ‘eligible medical services’ provided by any HCSM you are considering to make sure that it includes care for any pre-existing conditions you might and that all the types of eligible medical expenses are in accordance to your own ethical or belief system.
Which Health Care Sharing Ministries Meet the Guidelines?
At this time, our research has only found 4 HCSM that meet the guidelines listed below which qualify its members for exemption from the fee: Samaritan Ministries, Christian Healthcare Ministries, Christian Care Ministries (also known as Medishare), and Liberty HealthShare.
FACT: The health care sharing ministry (or a predecessor) must have been in existence and sharing medical expenses continuously and without interruption since December 31, 1999. An individual who is unsure whether a ministry meets the requirements.
How to Apply for the Health Care Sharing Ministries Exemption
Applying for this exemption can be done by filling out the exemption application form available through the Marketplace or by simply filing an exemptions form 8965 with your annual taxes (see page 9 of the 8965 instructions for this form).
What qualifies as a Health Care Sharing Ministry?
Under the ACA, a HCSM is an organization which:
- Is a non-profit as described under 501(c)(3) and exempt from tax under 501(a)
- Members share a common ethical or belief system and share medical expenses amongst themselves in accordance with those beliefs, regardless of what state they reside or are employed
- Members can retain membership even after they develope a medical condition
- Itself (or a predecessor of it) has been in existence since December 31, 1999
- Members have shared medical expenses, without interruption, since at least December 31, 1999
- Conducts an annual audit by an independent certified public accounting firm