If you're self-employed and paying $200 a month to a health care sharing ministry instead of $700 for an ACA marketplace plan, you already know the math works in your favor at tax time — except it doesn't, at least not yet. Unlike a traditional health insurance premium, your monthly "share" to a ministry like Medi-Share, Christian Healthcare Ministries, or Liberty HealthShare currently isn't deductible as a medical expense on your federal return. A bill sitting in Congress right now, along with a related IRS proposal that's been gathering dust since 2020, could change that. Here's what's actually being proposed, who it would affect, and how to keep your books ready either way.
What is a health care sharing ministry, exactly?
Health care sharing ministries (HCSMs) are nonprofit organizations where members who share a common set of ethical or religious beliefs agree to help pay each other's medical bills. The oldest ones date back to 1981, and today more than 100 groups are certified with the Department of Health and Human Services through the Alliance of Health Care Sharing Ministries. Recent state-regulator data puts total U.S. participation at somewhere north of 1.7 million people, with Alliance-member ministries alone reporting roughly $1.1 billion in shared medical expenses in a single recent year.
The appeal is straightforward: monthly contributions typically run 40–50% below a comparable ACA marketplace premium, which is a meaningful line item for a sole proprietor or freelancer paying full freight without an employer subsidy.
The catch is just as straightforward, and it's the reason regulators keep flagging these programs: a health care sharing ministry is not insurance.
- Ministries are exempt from state insurance-commissioner oversight, so a denied "share request" has no appeals process the way a denied insurance claim does.
- Pre-existing conditions are frequently excluded or capped.
- There's no guaranteed payout — sharing is voluntary among members, not a contractual obligation the way an insurance policy is.
- Because HCSM membership is exempt from the ACA's individual mandate, it satisfies the coverage requirement in states that still have one, but it doesn't satisfy the minimum essential coverage standard that unlocks certain other tax benefits.
That last point is exactly where the current tax fight lives.
Why regulators keep sounding the alarm
Health policy analysts who track these programs closely aren't opposed to the concept — they're opposed to consumers conflating it with insurance. Louise Norris, a widely cited health policy analyst, has pointed out that while plenty of members have positive experiences, others get "left high and dry" when a share request is denied, and that treating non-ACA-compliant sharing programs the same as ACA-compliant insurance in state or federal policy "muddies the waters" for people comparing their options.
The practical risk shows up at the worst possible moment: a member submits a large hospital bill for sharing, and the ministry determines it falls under an excluded category (a pre-existing condition, a "lifestyle" exclusion, a cap on shareable amounts per incident) — and unlike a denied insurance claim, there's no state insurance commissioner to appeal to. That's a real financial exposure completely separate from the tax question this article is about, and it's worth weighing before you let a lower sticker price make the decision for you.
The problem: shares aren't deductible, and marketplace subsidies don't apply
Two federal tax rules currently box out HCSM members:
- IRS Publication 502 doesn't list health care sharing ministry payments as a qualified medical expense, so they can't be claimed as an itemized medical deduction, run through an HSA, or (for the self-employed) taken as the above-the-line self-employed health insurance deduction under Section 162(l).
- Because HCSM membership isn't "minimum essential coverage," it can't be paired with ACA premium tax credits the way a marketplace plan can.
For a self-employed person weighing a $250/month ministry share against a $650/month bronze plan, the ministry is cheaper up front — but the insurance premium is often deductible (fully or partially) while the ministry payment is not. That gap is what two current federal efforts are trying to close from opposite directions.
H.R. 2062: the "Health Care Sharing Ministry Tax Parity Act"
Introduced in the 119th Congress by Reps. Mike Kelly (R-PA), Greg Murphy (R-NC), and Chris Smith (R-NJ), H.R. 2062 would amend the Internal Revenue Code so that amounts paid for health care sharing ministry membership — including the monthly share itself and associated administrative fees — count as a deductible medical expense, the same way a health insurance premium does today. A companion bill, S. 653, is moving in the Senate, and its text specifies the change would apply to taxable years beginning after December 31, 2025, if enacted.
The argument from sponsors is one of parity: employer-paid health premiums are already excluded from taxable income, and traditional individual-market premiums are deductible for the self-employed under Section 162(l), so treating HCSM payments differently penalizes people who chose a lower-cost, non-insurance option. Versions of this bill have circulated since at least the 118th Congress (as H.R. 8776) without passing, and several states — Missouri, Indiana, and Oklahoma among them — have already enacted their own state-level "tax parity" laws for HCSM contributions while the federal version stalls.
The IRS's separate HRA proposal
Running in parallel, and predating H.R. 2062, is a proposed IRS regulation — first floated in 2020 and still not finalized — that would classify HCSM shares and direct primary care membership fees as payments for "medical care," making them eligible for reimbursement through a Health Reimbursement Arrangement (HRA). Practically, that would let a small employer using a Qualified Small Employer HRA (QSEHRA) reimburse an employee's ministry share tax-free, provided the employee separately maintains a minimal ("skinny") ACA-compliant plan to satisfy the QSEHRA's minimum-coverage requirement. Individual Coverage HRAs (ICHRAs) are a messier fit, since HCSM membership still wouldn't count as the "individual coverage" an ICHRA is built to reimburse.
Neither the IRS rule nor H.R. 2062 has been finalized as of this writing. But together they signal that the tax treatment of health sharing is likely to shift in the next couple of years, not stay frozen where it's been for over a decade.
Doing the math: what a deduction would actually be worth
Say you're a self-employed consultant paying $275/month ($3,300/year) for a health care sharing ministry, versus a $700/month ($8,400/year) ACA bronze plan with no subsidy eligibility. Today:
- The ministry share stays non-deductible. Your effective annual cost is the full $3,300.
- The bronze plan premium is deductible above the line under Section 162(l), assuming you have net self-employment profit at least equal to the premium. At a combined 30% marginal federal/state income tax rate, the $8,400 premium nets out to roughly $5,880 after the tax benefit — still more than double the ministry's after-tax cost, but a meaningfully smaller gap than the sticker prices suggest.
If H.R. 2062 passes and extends 162(l)-style treatment to HCSM payments, that same $3,300 ministry share would net out to roughly $2,310 after tax at the same 30% rate — widening the cost advantage over traditional insurance even further, on top of the coverage-quality tradeoffs above. That's the number driving both the bill's supporters and the insurance industry's objections: it doesn't just remove a penalty, it actively tilts the after-tax comparison further toward sharing ministries.
What this means for you right now
If you're self-employed and currently in a health care sharing ministry, nothing changes about your 2025 or 2026 return until one of these actually passes — keep tracking your monthly share payments as a non-deductible personal expense for now, but keep every receipt and statement, because if H.R. 2062 or the IRS rule finalizes retroactively-friendly guidance, you'll want a clean paper trail to substantiate a deduction or an HRA reimbursement claim without having to reconstruct a year of payments from memory.
If you run a small business and are weighing a QSEHRA for your employees, this is worth watching closely: an employee opting into a $200/month ministry share instead of a $650/month marketplace plan currently limits how much of that cost you can reimburse tax-free. If the IRS rule finalizes, that gap closes, and QSEHRA design decisions you make today may need revisiting.
If you're comparing a ministry to ACA coverage purely on cost, remember the deduction question is separate from the coverage-quality question. A cheaper share with a capped or excluded pre-existing condition is still a real financial exposure regardless of how it's taxed — model the downside case, not just the sticker price.
Track it now so you're not scrambling later
Whichever way you're currently paying for health coverage — sharing ministry, marketplace premium, or employer HRA reimbursement — the practical lesson here is the same one that comes up every time Congress or the IRS reshuffles what counts as deductible: the businesses and freelancers who benefit are the ones who already have clean, itemized records, not the ones scrambling through a shoebox of bank statements after a law changes. A ministry share that isn't broken out from your general "health" spending today is a deduction you'll have a hard time claiming retroactively tomorrow.
This is a good moment to set up a dedicated account in your books — Expenses:Health:SharingMinistry or similar — separate from any HSA contributions, direct primary care fees, or out-of-pocket medical costs, so that whichever expense categories eventually become deductible, you can pull an accurate total with one query instead of a manual audit.
Simplify Your Financial Management
Tax rules around health coverage keep shifting, and the deductions you can claim often depend on how precisely your expenses were categorized when you paid them, not when you file. Beancount.io gives you plain-text, version-controlled accounting where every payment — a ministry share, an HRA reimbursement, a marketplace premium — is a line you can tag, query, and audit years later with full transparency. Get started for free and see how developers and self-employed professionals are keeping their books ready for whatever Congress decides next. Check out the docs to see how easy it is to set up expense categories that track exactly what you need.