Income tax; creating the Health Care Sharing Ministries Tax Parity Act; providing deduction for certain expenditures. Effective date.
Summary
SB1406 creates the “Health Care Sharing Ministries Tax Parity Act” and amends Oklahoma income tax law to give certain members of health care sharing ministries (HCSMs) a tax deduction and tax exemption. Beginning with tax year 2027, a qualified individual may deduct from Oklahoma adjusted gross income the amount paid for qualified health care sharing expenses, which includes membership payments, medical expense sharing, and administrative fees for the ministry. The bill also excludes from taxable income any qualified health care share received by an individual taxpayer as a result of membership in an HCSM.
The bill defines an HCSM as a nonprofit, tax-exempt organization with members sharing common ethical or religious beliefs, operating as a facilitator for voluntary sharing of medical costs, and providing disclosures stating that it is not insurance and that participation does not create a legal obligation for others to pay a member’s medical bills. It also requires the Oklahoma Tax Commission to create claim forms, adopt rules, and establish verification procedures for the deduction and exemption.
Impact
SB1406 would add a new income tax deduction and income exclusion in Title 68 for qualifying participants in health care sharing ministries, beginning in tax year 2027. It would affect Oklahoma taxpayers who are active HCSM members for at least one month during the tax year, and it would require the Oklahoma Tax Commission to administer the benefit through prescribed forms, rules, and claim verification. The bill would not regulate insurance directly, but it would reinforce the legal distinction between HCSMs and insurance by requiring a statutory disclaimer and by treating qualifying amounts as tax-favored rather than taxable income.
Sentiment
The available legislative history shows limited recorded debate or voting information, so there is no strong documented floor or committee sentiment in the materials provided. Based on the bill’s structure, it appears designed to support members of health care sharing ministries and to align their tax treatment more closely with their out-of-pocket contributions and shared medical assistance. The referral to Revenue and Taxation and then Appropriations suggests it was treated as a fiscal policy measure with potential revenue implications.
Contention
The main policy issue likely concerns whether HCSM contributions and distributions should receive tax treatment similar to health insurance-related expenses, since the bill grants a deduction and exclusion to a group that is explicitly not insurance. Supporters would likely emphasize tax parity and relief for religiously affiliated or faith-based sharing arrangements, while opponents may question whether the state should subsidize or favor these ministries through the tax code. Additional points of contention may include verification of eligibility, the fiscal cost to state revenues, and whether the bill creates unequal treatment among taxpayers who use different forms of medical coverage or cost-sharing arrangements.