SB 18-HEALTH CARE SHARE MINISTRY NOT INSURANCE  5:07:22 PM CHAIR OLSON announced that the next order of business would be SENATE BILL NO. 18, "An Act exempting a health care sharing ministry from regulation as an insurer." 5:07:40 PM RYNNIEVA MOSS, Staff, Senator John Coghill, informed the committee SB 18 is a bill that places in statute the current practice of the Division of Insurance, Department of Commerce, Community & Economic Development, to exempt health care sharing ministries from regulation as insurance, because health care sharing ministries are charitable organizations. Firstly, the bill exempts health care sharing ministries from regulation, and secondly, the bill further defines health care sharing ministries, consistent with the definition of those ministries in the Patient Protection and Affordable Care Act (PPACA), which exempts said ministries from requirements of PPACA. Provisions in the bill are consistent with PPACA in that ministries must be 26 U.S.C 501(c)(3) not-for-profit exempt from taxation, faith- based, and participants must share a common set of ethical or religious beliefs. In addition, a participant cannot lose membership after developing a medical condition, the corporation must have been in existence since 12/31/99, the organization must have had medical expenses shared continuously and without interruption since 12/31/99, and the organization must have an annual audit. Currently, 30 states have safe harbor laws in place, in response to threats that these organizations would be regulated as insurance companies. Ms. Moss expressed her understanding that between 250,000 to 400,000 Americans belong to these ministries, and in 2015, over $340 million in medical expenses were paid by members of the ministries. 5:10:13 PM REPRESENTATIVE HUGHES asked how many Alaskans would be affected by the proposed legislation. MS. MOSS estimated between 3,400 and 3,500. REPRESENTATIVE KITO inquired as to the services provided by the ministries. For example, are services provided on an emergency, fund-raising basis, or is there an expectation of regular health care, such as preventative annual check-ups. MS. MOSS explained that services depend upon the articles of incorporation, bylaws, and policies of each ministry. There are some with deductibles. She pointed out that the ministry does not pay the bills, but acts as an administrator, notifying members of medical costs, and members donate funds directly to the patient. REPRESENTATIVE KITO asked whether an individual member pays a regular amount or determines the amount of their donation. MS. MOSS advised there is no guarantee that any member will contribute, therefore, the ministry is not insurance. Each member of the ministry must be asked to contribute to pay a patient's medical bill. CHAIR OLSON asked whether payments are 100 percent. MS. MOSS said the policies vary. REPRESENTATIVE JOSEPHSON surmised the concept of the health care ministries is discussed in PPACA, and is federal law. MS. MOSS said correct. In further response to Representative Josephson, she confirmed that members of health care ministries are exempted from the PPACA requirement of obtaining insurance. REPRESENTATIVE HUGHES questioned how well members are cared for. 5:14:35 PM MS. MOSS related that in 1998, a state court determined that health care ministries are not insurance based in part on that the failure to pay rate was one-half of 1 percent. Because of the members' faith-based beliefs, medical bills were paid. REPRESENTATIVE KITO asked whether the ministries are registered as corporations in Alaska, or if the pool of members is nationwide. MS. MOSS stated that health care sharing ministries are nationwide, so Alaskan members belong to a nationwide pool. She advised that the Division of Insurance supports the bill, and restated that the division currently treats the ministries as not insurance. The bill seeks to ensure that coverage is not interrupted by a change in policy by the division of insurance. 5:16:51 PM CHAIR OLSON opened public testimony. After ascertaining no one wished to testify, public testimony was closed. 5:17:04 PM REPRESENTATIVE HUGHES moved to report SB 18, Version 29- LS0107\H, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, SB 18 was reported out of the House Labor and Commerce Standing Committee