Medi-Share Tax Exemption and Filing Income Taxes
- Members of healthcare sharing ministries are exempt from the federal "tax" imposed on those who don't have health insurance.
- Christian Care Ministry's Certificate of Exemption can be viewed here.
- Members will prove their qualification for this exemption for the year 2016 when filing federal income tax returns in 2017. When completing taxes, you will see this question:
- Health care: individual responsibility (see instructions) Full-year coverage Members should not fill in that check box; instead, when they read the instructions for their tax form, it will indicate that you need to attach a completed form 8965 if claiming an exemption.
- The IRS has posted form 8965 to be used to claim the exemption from the individual mandate. You can read the detailed Instructions for Form 8965 here.
- There is no need or reason to use the government health insurance exchange to "prove" the exemption. In fact, going to an exchange requires the member to submit personal information and may require duplicate filings and confusion because of the design of the exchange.
- Members who were not members of a healthcare sharing ministry for the entirety of 2016, or who had health insurance for part of 2016, will note their partial coverage on the form, indicating which months they had which.
- Members should always consult their tax professional with specific questions. This information is provided only as a guide.
Specific Instructions for Completion of form 8965 for Members of Healthcare Sharing Ministries
- Do not complete Part I
- Answer "No" for Part II (unless you are claiming an income hardship exemption)
- Complete Part III
- Use column C "Exemption Type" to identify the type of coverage exemption you are claiming. The Coverage Exemption Type for members of a healthcare sharing ministry is "D".
- The instructions for members of a healthcare sharing ministry: Member of a health care sharing ministry (code "D"). You can claim a coverage exemption for yourself or another member of your tax household for any month in which the individual was a member of a health care sharing ministry for at least 1 day in the month. Enter code "D" in Part III, column c, and identify the months to which the coverage exemption applies as described under Column d - p-Calendar Months, later. In general, a health care sharing ministry is a tax-exempt organization whose members share a common set of ethical or religious beliefs and share medical expenses in accordance with those beliefs, even after a member develops a medical condition. The health care sharing ministry (or a predecessor) must have been in existence and sharing medical expenses continuously and without interruption since December 31, 1999. An individual who is unsure whether a ministry meets the requirements should contact the ministry for further information.
- For short gaps in coverage, you will use Coverage Exemption Type "B" and identify the months to which the exemption applies. This is the explanation for short gaps in coverage included in the instructions:You generally can claim a coverage exemption for yourself or another member of your tax household for each month of a gap in coverage of less than 3 consecutive months. If an individual had more than one short coverage gap during the year, the individual is exempt only for the month(s) in the first gap. If an individual had a gap of 3 months or more, the individual is not exempt for any of those months. For example, if an individual had coverage for every month in the year except February and March, the individual is exempt for those 2 months. However, if an individual had coverage for every month in the year except February, March, and April, the individual is not exempt for any of those months.