Section 1. Short Title. This Act shall be known as the “Health Care Sharing Ministries Tax Parity Act.”

Section 2. Definitions. As used in this Act, the following definitions apply:

(A) “Health care sharing ministry” has the meaning set forth in {insert existing state code}

{Drafting Note: The following language may be used as an alternate Paragraph A if health care sharing ministries are not already defined in state code.}

(A) “Health care sharing ministry” means a non-profit organization that is tax exempt under the Internal Revenue Code which:

1. Limits its members to those members who share a common set of ethical or religious beliefs;
2. Acts as a facilitator among members who have financial or medical needs to assist those with financial or medical needs in accordance with criteria established by the health care sharing ministry;
3. Provides for the financial or medical needs of a member through contributions from other members.
4. Provides amounts that members may contribute with no assumption of risk or promise to pay among the members and no assumption of risk or promise to pay by the health care sharing ministry to the members;
5. Provides to the members a written statement at least quarterly with the total dollar amount of qualified medical needs actually shared in the previous reporting period in accordance with criteria established by the health care sharing ministry; and
6. Conducts an annual audit which is performed by an independent certified public accounting firm in accordance with generally accepted accounting principles and which is made available to the public by providing a copy upon request, or by posting on the organization’s website.
7. Provides a written disclaimer on or accompanying all applications and guideline materials distributed by or on behalf of the organization that reads, in substance: “Notice: The organization facilitating the sharing of medical expenses is not an insurance company, and neither its guidelines nor plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary because no other member will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payments for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills.”

(B) “Qualified health care sharing expenses” means the amount paid by a qualified individual for membership in a health care sharing ministry for the individual, or the individual’s spouse or dependent, including

1. the sharing of medical expenses with respect to such ministry, and
2.  the payment of administrative fees of such ministry.

(C) “Qualified health care share received” means an amount a taxpayer receives as a member of a health care sharing ministry to assist with a medical expense.

(D) “Qualified individual” means an individual who is:

1. a resident of {state name}; and
2. a member of a health care sharing ministry for at least one (1) month during a taxable year for which the qualified individual claims a deduction under this section.

Section 3. Income Tax Deductions and Credits.

(A) Whenever in this {insert code, title, chapter, or appropriate description that describes the state’s regulation of health insurance statutes} a deduction or credit is allowed for expenditures for “medical care” or health insurance premiums, qualified health care sharing expenses paid by a qualified individual as a member of a health care sharing ministry shall qualify for said deduction or credit.

Section 4. Determining Adjusted Gross Income.

(A) Each taxable year, a qualified individual is entitled to a deduction from the qualified individual’s adjusted gross income for the taxable year in an amount equal to the total amount of qualified health care sharing expenses paid by the qualified individual during the taxable year.

(B) To receive the deduction allowed by this section, a qualified individual must claim the deduction on the qualified individual’s annual state tax return or returns in the manner prescribed by the {state tax authority/agency}. The qualified individual shall submit to the {state tax authority/agency} any information that the {state tax authority/agency} determines is necessary to calculate the amount of the deduction allowed by this section.

(C) Any qualified health care share received by a taxpayer for medical expenses for which no deduction against taxable income has been taken shall not be considered taxable income.

Section 5. {Severability Clause.}

Section 6. {Effective Date.}