Understanding Health Care Sharing and Taxes: A Comprehensive Guide
Managing family finances with biblical wisdom requires diligence, stewardship, and a clear understanding of federal and state laws. As millions of faithful Americans seek alternatives to conventional corporate options, questions regarding taxes, exemptions, and financial reporting naturally arise. If you participate in or are considering joining a faith-based Health Care Sharing Ministry (HCSM) like Anglican Care, knowing how health care sharing interacts with your tax return is essential for your household’s financial peace of mind.
Rooted in Florida, Anglican Care provides transparent guidance to help our Christian members navigate health care sharing and taxes with total confidence and clarity.
Federal Tax Status and the Individual Mandate
Historically, the Affordable Care Act (ACA) included an individual mandate requiring Americans to maintain qualifying health coverage or pay a tax penalty. However, federal law explicitly recognized Health Care Sharing Ministries under Section 5000A(d)(2)(B) of the Internal Revenue Code, granting members an official exemption from individual mandate penalties.
With the passage of the Tax Cuts and Jobs Act of 2017, the federal individual mandate penalty was reduced to zero at the federal level beginning in tax year 2019. This means that under current federal tax law, American taxpayers are not subject to federal tax penalties for choosing to participate in a Health Care Sharing Ministry rather than commercial plans.
State-Level Tax Mandates and Considerations
While federal tax penalties for not holding corporate policies have been eliminated, a small number of states (such as California, Massachusetts, New Jersey, Rhode Island, and Vermont, plus the District of Columbia) have enacted state-level individual mandates. In most of these jurisdictions, participation in a qualified Health Care Sharing Ministry meets state exemption criteria or qualifies for moral exemption status. Members living outside of Florida should consult a qualified local tax professional to review specific state tax filing instructions for their home state.
Are Monthly Contributions Tax-Deductible?
A common question among new Anglican Care members is whether monthly contributions can be deducted on federal income tax returns as medical expenses. Under current IRS guidelines, voluntary monthly contributions made to a Health Care Sharing Ministry are generally treated as voluntary charitable gifts or shared medical contributions rather than deductible commercial premiums.
Deductibility of Out-of-Pocket Eligible Medical Needs
While your routine age-banded monthly contributions themselves are generally non-deductible personal expenses under standard tax rules, actual out-of-pocket medical expenses that you pay directly (such as unshared medical expenses, co-shares, or unshared medical services) may qualify for itemized medical expense deductions under IRS Publication 502, provided your total qualified medical expenses exceed the applicable percentage of your Adjusted Gross Income (AGI).
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)
Under current federal tax code definitions, traditional Health Savings Accounts (HSAs) require enrollment in a high-deductible corporate policy. Because Health Care Sharing Ministries are voluntary ethical communities rather than policy providers, pairing a traditional tax-advantaged HSA directly with a sharing ministry program requires careful structure under current IRS rules.
However, many members successfully utilize Flexible Spending Accounts (FSAs) or Health Reimbursement Arrangements (HRAs) provided by small business employers, or maintain existing HSA funds accumulated prior to joining Anglican Care to pay for eligible out-of-pocket medical needs.
Financial Stewardship Across Anglican Care Program Tiers
Anglican Care is committed to helping members achieve true financial stewardship. By replacing expensive corporate rates with voluntary age-banded monthly contributions, families often save 30% to 50% or more compared to conventional commercial options. These substantial monthly savings can be redirected into personal savings accounts, retirement funds, or charitable giving.
To support diverse financial goals, Anglican Care offers flexible program tiers:
- Foundational: Budget-friendly protection against major medical events with our lowest age-banded monthly contributions.
- Essential: Balanced everyday protection combining routine doctor visit sharing with inpatient hospital support.
- Complete: Comprehensive sharing protection covering wellness care, specialist visits, and high annual sharing caps.
- Senior Care: Structured financial support complementing Medicare for seniors 65 and older.
- Catastrophic Add-On: High-limit enhancement protecting household savings from extraordinary medical emergencies.
Navigating Tax Preparation with Confidence as a Sharing Member
When preparing your annual tax filings, keeping detailed records of your healthcare expenses is always best practice. Anglican Care provides members with annual contribution summaries through our secure member portal, detailing total voluntary monthly contributions made throughout the calendar year.
Tax preparation for sharing ministry members is straightforward. Because HCSMs are recognized non-profit entities, participating members simply check the appropriate exemption or status boxes when filing state or federal forms where applicable, knowing their participation is fully backed by federal statutory guidelines.
Honoring God through Wise Financial Management
In Romans 13:7, the Apostle Paul instructs Christians to “Render to all their dues: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.” By maintaining transparent guidelines, providing annual contribution statements, and supporting members with clear tax documentation, Anglican Care ensures that your participation in our Christian sharing community fulfills both your spiritual calling and your civic responsibilities as a faithful American citizen.