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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
health care ministries; exemption; definition
Purpose
Removes the requirement for a health care sharing ministry (HCSM) to have been in existence and sharing member medical expenses continuously since December 31, 1999.
Background
An HCSM is a nonprofit organization exempt from federal income tax under section 501 of the Internal Revenue Code (IRC) that: 1) limits membership to those who share a common set of ethical or religious beliefs; 2) facilitates financial and medical needs among members, consistent with the HCSM's criteria; 3) provides for financial and medical needs through contributions from one member to another; 4) suggests amounts that members may contribute with no assumption of risk or promise to pay by members or the HCSM; 5) provides a written monthly statement to all members that lists the total dollar amount of qualified needs submitted to the HCSM and the amount actually published or assigned to members for their contribution; and 6) provides a specified written disclaimer on all distributed applications and guideline materials. HCSM practices do not constitute the transaction of insurance business in Arizona (A.R.S. § 20-122).
Laws 2015, Chapter 136 required HCSMs to also meet the federal HCSM definition requirements. Under federal law, an HCSM must: 1) share medical expenses among members in accordance with a common set of ethical or religious beliefs; 2) retain members even after a member develops a medical condition; 3) have been in existence and sharing medical expenses continuously and without interruption since December 31, 1999; and 4) conduct an annual audit performed by an independent certified public accounting firm, which is available to the public upon request (26 U.S.C. § 5000A).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Removes the requirement for an HCSM, or its predecessor, to have been in existence and sharing member medical expenses continuously and without interruption since December 31, 1999.
2. Becomes effective on the general effective date.
Prepared by Senate Research
February 1,
2021
MG/gs