Firm Calls for Changes to Definition of Healthcare Sharing Ministries

July 1, 2020

DEPARTMENT OF THE TREASURY
Internal Revenue Service
Washington, DC

Re: Request for Comments: DEFINITION OF A HEALTH CARE SHARING MINISTRY
Notice of Proposed Rulemaking: Certain Medical Care Arrangement
26 CFR Part 1
[REG-109755-19]
RIN 1545-BP31

To whom it may concern:

The undersigned legal counsel for Sharable, LLC (www.sharable.life) submits comments with respect to proposed IRS REG-109755-19; particularly, the definition of a health care sharing ministry. These comments respond to the Service's specific request for comments on this definition (see, 85 FR 35398, Explanation of Provisions, ¶ 2, p. 3).

Comments are submitted on behalf of Sharable, LLC and are further supported by the attached letters of Pinaki Asher (a Hindu religious practitioner) and Vikram Saini, JD (a Sikh religious practitioner), who wish to engage in health care sharing practices in their respective religious communities, and otherwise benefit from the proposed section 213 deduction.

About Sharable, LLC

Sharable, LLC is a technology services provider in Melbourne, Florida that provides industry-leading, cloud-based software and technology services to health care sharing ministries. Sharable's CEO, Mr. Tony Meggs, and COO, Mr. Robert Baldwin, each previously served as CEO of Christian Care Ministry Inc. d/b/a Medi-Share (“Medi-Share”), a prominent healthcare sharing ministry. In addition, Mr. Baldwin was instrumental in helping form the Alliance of Health Care Sharing Ministries, the primary industry association for healthcare sharing ministries. As such, Mr. Meggs and Mr. Baldwin have a wealth of experience in the healthcare sharing industry, both in the established side of the business and as industry innovators. These comments reflect, in part, their background and experience.

ANALYSIS

The Current Definition of a Healthcare Sharing Ministry Proposed by the Service

For the purposes of section 213, the regulations currently proposed by the Internal Revenue Service would define a health care sharing ministry as an organization:

Sharable agrees with paragraphs (1), (2), (3) and (5) of the Service's current proposed definition but objects to including paragraph (4). Paragraph (4) should be stricken from the proposed definition of a health care sharing ministry, leaving only the remaining paragraphs. Paragraphs (1), (2), (3) and (5) compose a fully workable, and jurisprudentially sound, definition of a health care sharing ministry. This is the definition the Service should use in crafting its final regulations applicable to section 213.

The primary reason for deleting paragraph (4), commonly referred to as the “1999 Date Stamp requirement,” is that it violates the Establishment Clause of the First Amendment to the US Constitution. In effect, paragraph (4) “gerrymanders” the proposed income tax deduction to only benefit selected religious denominations to the exclusion of all others, in violation of the Establishment Clause.

In addition, while paragraph (4) has been part of IRC §5000A(d)(2)(B)(ii) since inception of the Affordable Care Act, it has proven susceptible to abuse and manipulation, while serving no legitimate legislative purpose.

We address these issues, in turn:

Paragraph (4) violates Establishment Clause Jurisprudence

Settled Supreme Court jurisprudence states, "the Establishment clause prohibits government from putting “an imprimatur on one religion, or on religion as such, or to favor the adherents of any sect or religious organization." Texas Monthly, Inc. v. Bullock.¹

And as Mr. Justice Black had observed earlier in Everson v. Board of Education of Ewing Tp:²

[T]he First Amendment 'means at least this: Neither a state nor the Federal Government can * * * pass laws which aid one religion, aid all religions, or prefer one religion over another. [Emphasis added.]

Supreme Court jurisprudence follows a consistent and clear course in matters of tax and commerce issues under the Establishment Clause: religious organizations can benefit from legislative preference insofar as the same benefits extend beyond a particular religion — or religion itself — and cast a wide net of inclusion across sectarian boundaries. In effect, government cannot pass laws that, in the words of Mr. Justice Black, would "aid or prefer one religion over another," or "religion as such."

Thus, in Walz v. Tax Commission of City of New York,³ the US Supreme Court affirmed a New York State property tax exemption that benefited church property on the basis that:

[The State of New York] has not singled out one particular church or religious group or even churches as such; rather, it has granted exemption to all houses of religious worship within a broad class of property owned by nonprofit, quasi-public corporations which include hospitals, libraries, playgrounds, scientific, professional, historical, and patriotic groups. The State has an affirmative policy that considers these groups as beneficial and stabilizing influences in community life and finds this classification useful, desirable, and in the public interest. [Emphasis added.]

But in Larson v. Valente⁴ the US Supreme Court struck a Minnesota exemption that benefitted only religious organizations that received more than half of their total contributions from members or affiliated organizations. The Court disapproved of a “50 percent contribution rule” that triggered the exemption, explaining:

It is plain that the principal effect of the fifty per cent rule [in the Minnesota Act] is to impose the registration and reporting requirements of the Act on some religious organizations but not on others. It is also plain that, as the Court of Appeals noted, "[t]he benefit conferred [by exemption] constitutes a substantial advantage; the burden of compliance with the Act is certainly not de minimis." 637 F.2d, at 568. We do not suggest that the burdens of compliance with the Act would be intrinsically impermissible if they were imposed evenhandedly. But this statute does not operate evenhandedly, nor was it designed to do so: The fifty per cent rule . . . effects the selective legislative imposition of burdens and advantages upon particular denominations.

* * *

In short, the fifty per cent rule's capacity — indeed, its express design — to burden or favor selected religious denominations led the Minnesota Legislature to discuss the characteristics of various sects with a view towards "religious gerrymandering." [Emphasis added.]

Comparing these two cases, it is clear that the New York property tax exemption was on sound footing because, while benefitting religious institutions, “it has not singled out one particular church or religious group or even churches as such; rather, it has granted exemption to all houses of religious worship within a broad class of property . . .” However, the Minnesota registration exemption ran afoul of the Establishment Clause precisely because the burdens and advantages of the legislation were selectively imposed — a statutory design that amounted to religious gerrymandering.

These Establishment Clause guideposts should guide the Service in defining a healthcare sharing ministry under the proposed rule. The income tax advantages under section 213 are substantial and may not applied in a way that gives selective advantage to practitioners of one religious denomination over another. And yet paragraph (4) of the current proposed definition does precisely that — it would allow the proposed tax deduction to benefit only healthcare sharing ministries:

(4) which (or a predecessor of which) has been in existence at all times since December 31, 1999, and medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999.

A count of the 104 known and active health care sharing ministries that actually qualified for the Affordable Care Act healthcare sharing exemption (i.e., organizations certified by HHS for the purposes of the §5000A(d)(2)(B)(ii) Individual Mandate exemption) reveals three glaring statistics:⁵

First, 97 of the 104 qualifying healthcare sharing ministries are Mennonite Christian / Old German Baptist organizations with closed memberships;

Second, of the remaining 7 (of 104 total) ministries that have open or modified open membership, six are conservative Christian organizations and one is a Catholic Christian organization.

Third, not a single non-Christian or non-sectarian organization was ever qualified by HHS.

The barrier that prevented non-Christian organizations from qualifying under the IRC §5000A(d)(2)(B)(ii) exemption to the ACA Individual Mandate was the 1999 Date Stamp requirement. And yet, this was simply an historical artifact: the healthcare sharing concept had not taken root in non-Christian groups (or even in most Christian groups) in the United States by Dec. 31, 1999.

Healthcare sharing started in the 1800s in Mennonite closed communities, and later expanded to a small number of conservative Christian groups prior to Dec. 31, 1999. But because non-Christian organizations were not actively and continuously sharing medical expenses by and since Dec. 31, 1999, their members were categorically barred from the Affordable Care Act healthcare sharing ministry exemption during its enforcement period (2014-2019).

Were the Service to carry forward the discriminatory requirement of paragraph (4) from the Affordable Care Act exemption into the new proposed regulation under section 213, non-Christian organizations would also be barred from claiming the income tax deduction under the proposed regulation — simply because there were no non-Christian healthcare sharing ministries active in the United States by Dec. 31, 1999.

The same can be said for Christian communities who had not embraced healthcare sharing by Dec. 31, 1999. These Christian organizations, just as their non-Christian counterparts, will be barred from claiming the section 213 deduction, simply because they had not embraced healthcare sharing soon enough.

US Supreme Court jurisprudence insructs that federal and state legislation may not aid one religion, or otherwise prefer one religion over another. But if the Service retains paragraph (4) in the healthcare sharing definition, that is precisely what will happen. 97 Mennonite Christian groups will be allowed the section 213 tax deduction. Six conservative Christian groups and one Catholic Christian group will also be allowed the section 213 deduction.

But non-Christian groups who embrace healthcare sharing will be denied this deduction, as will non-religious groups who otherwise share a common ethical belief, along with Christian groups who had not adopted a healthcare sharing practice by Dec. 31, 1999. Such a result would run afoul of the Establishment Clause. The Service would effectively be aiding and favoring 97 Mennonite Christian groups (closed communities), six Conservative Christian groups and one Catholic Christian group — at the expense of all other organizations who otherwise share common religious or ethical beliefs. This would be the very definition of an Establishment Clause violation.

Sharable's Proposed Definition

Sharable, LLC's proposal to the Service is to define a healthcare sharing ministry only under paragraphs (1), (2), (3) and (5). In so doing, the Service will extend the possibility for tax deduction benefits to all religious denominations, as well as to non-religious groups, who otherwise:

This modified definition will extend the possibility for section 213 tax deduction benefits beyond the 104 Mennonite Christian and Conservative Christian/Catholic groups, casting a broader net of inclusion across sectarian and non-sectarian boundaries. This proposed modified definition easily crosses Establishment Clause hurdles.

For the enumerated reasons under the Establishment Clause, Sharable, LLC urges the Service to adopt the definition of a healthcare sharing ministry proposed above.

Non-Christian Communities Wish to Practice Healthcare Sharing

Sharable is aware of several groups and communities that wish to engage in healthcare sharing under the law, but feel they are prevented from doing so because of the 1999 Date Stamp requirement.

For example, a Sikh group in Orlando, Florida desires to adopt healthcare sharing practices among the Sikh community, according to the shared religious belief of “seva.” Seva is a service which is performed without any expectation of result or award for performing it. Such services can be performed to benefit other human beings or society. The sharing of medical expenses within a Sikh community is an expression of seva. See, Vikram Saini, JD comment letter in support (attached).

Similarly, a Hindu community, also centered in Orlando, desires to adopt healthcare sharing practices among themselves, and according to their shared religious beliefs. The Hindu model of social development has distinct elements that comprise the teachings and commands of Vedic Scriptures. Principles of Karma, Dana, Paropkar, Moksha and Vasudhaiv-Kutumbkam are the core of the model. Among these, the core principle of “Paropkar” means to help others without expecting anything in return by them, which is a core tenant of healthcare sharing. For Hinduism all the world is a shared global abode, with no distinction between any creatures. The Hindu model emphasizes the welfare of all human beings — again a principle of healthcare sharing. See, Pinaki Asher comment letter in support (attached).

There are other examples of secular and non-secular groups who share a common religious or ethical belief, and wish to engage in healthcare sharing, subject to appropriate restrictions that are otherwise provided under paragraphs (1), (2), (3), and (5) of the proposed rule allowing the section 213 deduction.

The supporting statements of Ms. Asher and Mr. Saini were chosen as confirming examples.

Under the Establishment Clause, the Service should extend the proposed deduction under section 213 to all communities who share common religious or ethical beliefs, irrespective of whether healthcare sharing practices began before or after December 31, 1999. Shareable's revised definition accomplishes this important — and necessary — objective.

The 1999 Date Stamp Requirement has proven susceptible to abuse and manipulation

From 2014 to 2019, the Affordable Care Act's Individual Mandate was law of the land, requiring US citizens to purchase ACA-approved insurance — or pay a non-participation tax in lieu thereof. IRC §5000A(d)(2)(B)(ii) provided an exemption to the ACA Individual Mandate for select Christian communities engaged in healthcare sharing since 1999, as discussed above.

Because most of the Christian communities who had actually engaged in healthcare sharing since 1999 were closed Mennonite communities, the practice evolved by a few such community leaders to effectively “sell” access to their “1999 Date Stamp,” so that a new healthcare sharing ministry could claim successor status to a pre-existing ministry. Thus, reverse mergers were offered to would-be startup companies at high prices. This practice allowed a newly-formed ministry to assert, via the merger, that “medical expenses of its members have been shared continuously and without interruption since at least December 31, 1999.” Sharable, LLC officers have been approached more than once by entities wishing to monetize the value of their 1999 Date Stamp by just such a scheme.

In Sharable's view, this practice has no place in the healthcare sharing industry, and was made possible only because of the ill-advised 1999 Date Stamp requirement made part of the original ACA exemption under IRC §5000A(d)(2)(B)(ii). The disreputable practice of “selling” access to a pre-existing 1999 Date Stamp should not be perpetuated by the Service into the proposed section 213 regulation.

CONCLUSION

Sharable, LLC submits that the definition of a healthcare ministry should be limited to proposed paragraphs (1), (2), (3) and (5), omitting paragraph (4). In so doing, the Service will extend the possibility for tax deduction benefits to all religious denominations, as well as to non-religious groups, who otherwise:

This modified definition will extend the possibility for section 213 tax deduction benefits beyond the 104 Mennonite Christian and Conservative Christian/Catholic groups; and will extend an evenhanded benefit to communities who share a common ethical or religious belief of sharing, consistent with Establishment Clause requirements.

Sharable, LLC therefore urges the Service to adopt the definition of a healthcare sharing ministry proposed above.

Respectfully submitted,

KEVIN McBRIDE
Attorney for Sharable, LLC
McBRIDE LAW PC
Los Angeles, CA

Attachments:
Pinaki Asher comment support letter
Vikram Saini, JD comment support letter

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June 18, 2020

DEPARTMENT OF THE TREASURY
Internal Revenue Service
Washington, DC
Attn: Ms. Sunita Lough
Deputy Commissioner for Services and Enforcement

Re: Notice of Proposed Rulemaking: Certain Medical Care Arrangements
26 CFR Part
[REG-109755-19]
RIN 1545-BP31

TO WHOM IT MAY CONCERN:

My name is Vikram Jeet Singh Saini and I was born in Tampa, FL. I currently live in Orlando, Florida. I submit the following supplemental comments in support of Sharable, LLC's comment letter regarding the above matter.

I am a lifelong practitioner of the Sikh religion. My family and I were one of a handful of Sikh families in Central Florida who established the first permanent Sikh house of worship, known as a Gurdwara. We established the Sikh Society of Central Florida over 30 years ago and our community has grown to include several thousand members. My extended family and I continue to play an active role in Sikh community as well as in numerous interfaith organizations throughout Central Florida. I know many people in my community and earnestly believe that I express these comments in behalf of all.

There is a growing number of individuals within our local Sikh community, as well as across the nation, who wish to adopt healthcare sharing practices, in line with our central religious tenet of "Seva". Seva, or the concept of selfless service, is one of the core elements of our Faith. Our religious teaching emphasize that we use our lives for the betterment of others. Sikhs have been profiled throughout the United States and Internationally for their acts of selflessness, courage, and commitment to justice.

Sikhs nationwide and here in Florida, are also high educated and/or highly entrepreneurial. Several of these folks are small business owners who are constantly facing the rising costs of private health insurance and have typically turned to the Sikh community for assistance. During our standard prayers, we have a portion of the service called Ardass, or community prayers. During that time, our Priests (Gianis) typically ask the congregation if there is anything we can do to support someone. Often times we are asked to help individuals in and outside of our community with their medical needs.

The sharing of medical expenses within our community is most definitely an expression of Seva. I, along with numerous others in our local Sikh community, as well as, across the United States wish to practice healthcare sharing in accordance with our shared beliefs.

Vikram Saini, JD
Oviedo, FL

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June 18, 2020

DEPARTMENT OF THE TREASURY
Internal Revenue Service
Washington, DC
Attn: Ms. Sunita Lough
Deputy Commissioner for Services and Enforcement

Re: Notice of Proposed Rulemaking: Certain Medical Care Arrangements
26 CFR Part
[REG-109755-19]
RIN 154S-BP31

TO WHOM IT MAY CONCERN:

My name is Pinaki Asher. I was born in India and moved to the United States in 1999. I currently live in Melbourne, Florida. I submit the following supplemental comments in support of Sharable, LLC's comment letter regarding the above matter.

I am a lifelong practitioner of the Hindu religion. I am part of a Hindu community in Melbourne, Florida. I know many people in my community and believe I express these comments on behalf of all.

Many in our Hindu community wish to adopt healthcare sharing practices according to our shared religious belief of "seva."

The Hindu model of social development has distinct characteristics comprising the teachings and commands of Vedic Scriptures. Principles of Karma, Dana, Paropkar, Moksha and Vasudhaiv-Kutumbkam are the core of the model. Dharma is a code of ethics, a way of living through which one may achieve moksha (enlightenment, liberation).

Bhagavad Gita, the most famous Hindu scripture, is followed around the world even after centuries and explains, "When you have come to this world, do something good that benefits everybody. There is nothing for you to take away from this world. You have come to give. You have come here to do something beneficial for everybody. And you should all get together in doing service." That is the enlightenment path explained in core Hindu principals.

Karma (action and reaction) determines each soul's unique destiny. The law of karma underpins the process of transmigration of the soul. Karma literally means "action," but more often refers to the accumulated reactions to activities. Thus "good karma" and "bad karma," which are stored reactions that gradually unfold to determine our unique destiny.

Dana, or Charity, is an act of conscious and willing relinquishment of possession. Charity in all of these meanings is considered to be a purifying, refining practice on the path of spiritual progress. It is a service which is performed to accrue good karmic credits.

Paropkar means nothing but helping others without expecting anything in return by them, which is the core principal in healthcare sharing services. This as well stems from Karma: to exemplify from nature.

"— Rivers flow for Paropkar, Cows give milk for Paropkar, Trees bear fruits for Paropkar, similarly this body is also meant for Paropkar"

Vasudhaiv Kutumbkam — For Hinduism all the world is a global Abode and there is no distinction between any creatures. The Hindu model primarily emphasizes the welfare of all human beings, again a principal of Healthcare Sharing.

This is spoken about in the scriptural translation:

"— This is mine that is yours; This kind of calculation is done by narrow-minded people. For broadminded and liberalist this whole world is like a family"

Seva, or selfless service, is an essential part of each and every principal explained above.

Currently there are around 2.4 million Indian Hindu immigrants who, like me, call America their home. The Hindu community is much more prominent in states like California and New Jersey but has increased tenfold since my own settlement in Florida.

Manav Mandir of Melbourne is an example of the recent growth of the Indian Community in the US. So many small gas stations and motels are independently owned and operated by Hindu owners. The Indian Cultural Association around the US helps the Hindu community by offering annual free checkup services but the ability to expand this as a Healthcare Sharing Community would be a blessing to many, many Hindus. Those who can afford it will be doing a good deed ("karma") and have an opportunity to serve and help those who are under privileged, especially in the current Covid-19 climate when our economy has been hard hit.

The sharing of medical expenses within a Hindu community is an expression of Seva Dharam and Paropkar. I and others in our community wish to practice healthcare sharing in accordance with our shared beliefs and ethics as a path to spiritual liberation.

Pinaki Asher
West Melbourne, FL