Members – Tax Exemption
Instructions for UHSM Health Sharing Members When Filing Taxes
As a UHSM member, we’re thrilled that you chose to join our mission to expand healthcare quality, while driving down costs. We feel grateful to walk with you on this journey, caring for one another and sharing each other’s medical expenses when in need.
Our right to engage in UHSM member-to-member health sharing is exempt from the ACA individual mandate as “health coverage” according to 26 U.S.C. Section 5000A(d)(2)(B)(ii), the section of the Affordable Care Act which sets forth the federal definition for a qualified health care sharing ministry (“HCSM”). Please find HCSM tax compliance information on this page, including recent legislation and notices for Vermont, New Jersey and Washington D.C residents.
Members interested in the California healthcare legislation, AB-414, will have to wait for further instructions from the state. It is not yet clear what if any forms will be required for California. In the past health sharing members have completed Federal IRS Form 8965, including entering exemption code “D” on Part III under “Exemption Type”. Of course, members should always consult their tax professional with specific questions. This information is only a reference and should not be mistaken for professional tax advice.
UHSM Tax Exemption – Fully Qualified HCSM
UHSM Members Looking for Notice of Tax Status
As explained on this page, the ACA Individual Mandate and tax penalty at the U.S. Federal government level no longer exists. This also means that the Centers for Medicare & Medicaid Services (CMS) is no longer reviewing nor issuing letters to HCSM programs. However, should you or your tax professional want to see a legal memorandum on UHSM’s tax-exempt qualification please click here to download the PDF.
No Federal Mandate
Beginning with the 2019 tax season, there is no longer a federal mandate and penalty for not having health coverage. The ACA individual mandate still exists in the law, but President Trump made the penalty $0. Thus, there is no longer a need to provide proof of coverage via the insurance-completed Form 1095-A nor the IRS claim exemption Form 8965, which Health Care Sharing Ministry (HCSM) members would fill out. That said, there are certain state regulations so please consult your tax professional.
State Healthcare Tax Requirements
While the federal government no longer requires proof of healthcare coverage, many states have compliance regulations that UHSM members, or anyone sharing in an HCSM, should understand. First of all, Massachusetts has had its own version of healthcare as a state since 2006, with penalties for no coverage and forms to complete. If you live in Vermont, New Jersey or Washington, D.C. new healthcare mandate laws were passed that go in effect for the 2020 tax year. Please consult your tax professional and visit the links on each state for more information.
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