To amend the Internal Revenue Code of 1986 to treat membership in a health care sharing ministry as a medical expense, and for other purposes.
- Sponsor
- Rep. Kelly, Mike [R-PA-16]
- Committees
- Ways and Means Committee (primary)
- Last action
- Mar 11, 2025
Bottom line
H.R. 2062 aims to provide tax parity for health care sharing ministry members by making their contributions tax-deductible as medical expenses, while formally distinguishing HCSMs from traditional insurance and expanding eligibility to newer ministries.
What it actually does
This bill amends the Internal Revenue Code to allow individuals to deduct membership fees and shared medical expenses paid to a health care sharing ministry (HCSM) as medical expenses. It also explicitly states that HCSMs are not to be treated as health plans or insurance for tax purposes, clarifying their legal status under federal tax law. Furthermore, it broadens the definition of eligible HCSMs by removing a requirement for continuous existence since 1999.
Proponents argue
Supporters argue this bill provides essential tax fairness for members of health care sharing ministries, who often bear significant medical costs and administrative fees without the tax benefits afforded to those with traditional health insurance. They contend it recognizes the legitimate role HCSMs play in providing affordable healthcare options for millions of Americans, particularly those with religious objections to conventional insurance, and ensures these faith-based alternatives are not unfairly disadvantaged by the tax code.
Opponents contend
Critics might argue that treating HCSM contributions as medical expenses without subjecting HCSMs to the same regulatory oversight as insurance companies creates an uneven playing field and could encourage individuals to opt out of more regulated health coverage. They may also raise concerns about consumer protections, transparency, and the potential for HCSMs to deny coverage for pre-existing conditions or specific treatments, leaving members vulnerable despite tax benefits.
The bill is exceptionally short and clear, allowing for a quick and straightforward understanding of its provisions.
Section 1(a)
Tax Deductibility for Health Care Sharing Ministry Expenses
This provision amends the tax code to allow individuals to count payments made for membership in a health care sharing ministry, including the sharing of medical expenses and administrative fees, as deductible medical expenses. This means that these costs can be included when calculating the adjusted gross income threshold for medical expense deductions, potentially reducing a member's taxable income.
Supporters argue
Supporters argue this provision provides equitable tax treatment for HCSM members, aligning their healthcare-related expenses with those of individuals who pay traditional insurance premiums. They believe it recognizes the financial burden HCSM members undertake to cover their medical costs and promotes religious freedom by not penalizing those who choose faith-based healthcare alternatives.
Critics contend
Critics might contend that this provision creates a tax loophole for a specific type of healthcare arrangement that lacks the regulatory oversight and consumer protections of traditional insurance. They could argue it incentivizes opting out of more comprehensive and regulated health plans, potentially shifting costs or risks onto the broader healthcare system, and that it represents a tax expenditure benefiting a niche group.
Tradeoffs
The bill balances the desire for tax equity for HCSM members with concerns about the regulatory differences between HCSMs and traditional insurance. It aims to support alternative healthcare models but potentially at the cost of federal tax revenue and without addressing broader consumer protection issues often associated with unregulated healthcare sharing.
Section 1(b)
Clarification of Health Care Sharing Ministry Status
This section explicitly states that for the purposes of the Internal Revenue Code, a health care sharing ministry shall not be considered a "health plan" or "insurance." This formalizes the distinction between HCSMs and regulated insurance products, reinforcing their unique legal and operational status within the tax framework.
The bill defines "health care sharing ministry" by referencing an existing section of the Internal Revenue Code (5000A(d)(2)(B)(ii)) but explicitly states "without regard to subclause (IV) thereof." Subclause (IV) of 5000A(d)(2)(B) requires that a health care sharing ministry (HCSM) "has been in existence at all times since December 31, 1999." By removing this subclause, the bill effectively broadens the definition of an HCSM that qualifies for the new tax benefits and regulatory exemptions to include newer ministries.
Section 1(a) and Section 1(b)
Why it matters:This is a standard legislative technique for modifying existing definitions without rewriting them entirely. However, the specific exclusion has a substantive impact that a casual reader would likely miss.
Case for: Supporters would argue that removing the "in existence since 1999" requirement allows newer, legitimate health care sharing ministries to also qualify for the tax benefits and regulatory clarity, promoting competition and innovation in the HCSM sector. They might see it as a necessary update to an outdated restriction.
Case against: Critics might argue that the original "in existence since 1999" clause served as a safeguard, ensuring that only established and proven ministries received favorable treatment. Removing it could open the door for newer, potentially less stable or reputable organizations to benefit from tax deductions without a track record of reliability, increasing risks for members.
Estimated impact: This change could expand the number of eligible HCSMs and their members, potentially increasing the overall tax expenditure associated with the bill. It also broadens the scope of organizations that are explicitly not treated as insurance.