HSG Bulletin: What’s Going on in Washington State?

On August 3, 2022, the state of Washington adopted legislation (WA 284-43-8210) that would label health care sharing ministries, or HealthShares, as not being “health carriers” or “insurers.” It would also halt the sale of HealthShare memberships within the state for organizations that did not meet their criteria for legitimate health care sharing ministries (HCSMs).

According to the WAC 284-43-8210 definitions, Washington state says health care sharing ministries are organizations that, among other things,

  • are exempt from taxation under Section 501(a) of the Internal Revenue Code;
  • have members who share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs;
  • either has been, or has a predecessor which has been, in existence at all times since December 31, 1999.

There have been developments in recent months. The state of Washington found that OneShare Health “does not satisfy the requirements to be a valid” health care sharing ministry, and in 2021 OneShare agreed to stop offering memberships and to “not renew existing agreements, contracts, or memberships with Washington state residents.” The state is currently investigating other HealthShares to see if they meet the requirements of RCW 48.43.009 in order to be considered legitimate health care sharing ministries.

The case is ongoing, and many HealthShares have left comments in their defense against the legislation. The Alliance of Health Care Sharing Ministries argues that “the rule would violate state law and would represent an impermissible interpretation of the statute.” Sedera, another prominent HealthShare, says in their comments that they respect the Washington state Office of the Insurance Commissioner’s role in protecting Washington consumers, but argues that the company longevity requirement is “not the best way to protect consumers.”

Washington is one of only four states that requires HCSMs to have existed at all times since 1999 in order to operate there. Sedera argues that this requirement “does not effectively keep out bad actors or otherwise protect consumers, because many sharing organizations claiming pre-1999 status have acquired or merged with pre-1999 HCSMs for the explicit purpose of claiming the statutory exemption.”

The Washington state ruling has sent shockwaves through the HealthShare industry, and the developments and ramifications of this ruling could impact members nationwide.

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