Update on Health Care Sharing Ministries: Exempted from the ACA’s Individual Mandate – and State Consumer Protections

The Centers for Medicare and Medicaid Services (CMS) released this week a “Request for Comment,” asking organizations that believe they meet the standards for being a “health care sharing ministry” (HCSM) to step forward. Under the Affordable Care Act, members of HCSMs are exempted from the individual responsibility requirement to maintain health insurance coverage. But before individuals can qualify for this exemption, they must show they’re members of a bona fide HCSM. To guard against fraud, the law defines a HCSM as a non-profit organization, whose members “share a common set of ethical 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.” In addition, the HCSM must have been in existence “at all times” since December 31, 1999 and medical expenses among its members must have been shared “without interruption” since at least that date. And the organization must conduct an annual audit by an independent certified accounting firm. CMS is asking organizations that meet this description to step forward, so that the exchanges will know who should be legitimately exempted from the mandate.

As we’ve documented before on CHIRblog, HCSMs currently have a growing membership, now over 170,000 members across all 50 states. For people considering whether to join these organizations, it’s important to know that almost half the states have enacted laws stating that HCSMs are not health insurance companies and do not offer health insurance, meaning that members of HCSMs do not get the benefit of state consumer protections, such as solvency reserve requirements (which help ensure that the organization can pay claims). And if a consumer has a problem with the HCSM, such as when a claim is paid or a service not covered, the state insurance department cannot step in to help. A map of states exempting HCSMs from insurance regulation is available here. Three of the states (Arkansas, Idaho, and Texas) enacted their exemptions just this year.

Stay tuned to CHIRblog for further updates on these and other health insurance reform issues.

One thought on “Update on Health Care Sharing Ministries: Exempted from the ACA’s Individual Mandate – and State Consumer Protections

  1. There has been quite a bit of interest lately on health care sharing ministries. The exemption claims seemed too good to be true. But apparently the exemption is real. Thank you for sharing.

    The most interesting point for me is the requirement that an HCSM be in existence for 14 years. If this is indeed a viable way to provide affordable healthcare, why prohibit new players from entering the field?

Leave a Reply

Your email address will not be published. Required fields are marked *