Income tax; creating the Health Care Sharing Ministry Tax Parity Act; providing income tax deduction. Effective date.
Summary
SB 2158 creates the “Health Care Sharing Ministry Tax Parity Act” and adds a new income tax deduction and exemption for Oklahoma residents who participate in a qualifying health care sharing ministry (HCSM). Beginning with tax year 2027, a qualified individual may deduct from Oklahoma adjusted gross income the amount paid for qualified health care sharing expenses, including membership costs, medical expense sharing, and administrative fees, so long as the expense has not already been deducted elsewhere. The bill also excludes from taxable income certain amounts received from an HCSM to help cover medical expenses, if those amounts were not already deducted.
The bill defines an HCSM in detail, requiring it to be a 501(c)(3) nonprofit that limits membership to people sharing common ethical or religious beliefs, facilitates sharing of members’ medical or financial needs, provides quarterly statements of shared amounts, undergoes an annual independent audit, and includes a disclaimer stating it is not insurance and does not guarantee payment of medical bills. It also defines a qualified individual as an Oklahoma resident who has been an active member of an HCSM for at least one month during the tax year. The Oklahoma Tax Commission may require information to verify the deduction, and the act sunsets if Oklahoma ever stops collecting individual income tax.
Impact
If enacted, SB 2158 would amend Oklahoma income tax law by creating a new deduction in Title 68 for HCSM-related expenses and by making certain HCSM reimbursements nontaxable. The measure would affect individual taxpayers who belong to qualifying ministries, as well as the Oklahoma Tax Commission, which would be responsible for administering and verifying the deduction. The bill is set to take effect November 1, 2026, apply starting in tax year 2027, and expire automatically if the state no longer collects individual income tax.
Sentiment
The available voting history suggests generally favorable sentiment toward the bill, as it received a 8-2 do pass recommendation in the Senate Revenue & Taxation Committee. The bill was also later coauthored in the House, which indicates continued legislative support. No committee transcript is available, so the record does not show detailed floor or committee debate, but the vote margin suggests the proposal was viewed positively by a majority of committee members.
Contention
The main policy issue is whether health care sharing ministry participation should receive tax treatment similar to health insurance-related expenses. Supporters appear to favor tax parity for members of faith-based or ethical medical-sharing organizations, while potential critics may question whether these ministries should receive tax benefits despite explicitly not being insurance and not guaranteeing payment of medical bills. The bill’s detailed definition, disclaimer requirements, and audit/reporting rules suggest concern about distinguishing HCSMs from insurance and ensuring transparency and accountability.
Income tax; creating the Health Care Sharing Ministry Tax Parity Act; stating certain deduction and procedures; requiring Oklahoma Tax Commission to create forms and guidelines. Effective date.