Source: Courthouse News

January 14, 2025

A federal judge on Monday shot down a health care sharing ministry’s attempt to block Colorado from forcing compliance with reporting requirements.

“Maybe Colorado does take umbrage to the religious beliefs and practices of sharing ministries. But there is no evidence of that,” wrote U.S. District Judge Gordon Gallagher, a Joe Biden appointee, in his order denying Alliance of Health Care Sharing Ministries’ motion for preliminary injunction.

“Simply because many religious entities are active in a market does not mean that Colorado cannot permissibly regulate that market in response to documented abusive practices,” Gallagher added.

Alliance of Health Care Sharing Ministries, a Florida-based trade organization representing the interests of multiple health care sharing ministries, filed suit against the Colorado Division of Insurance in Colorado’s federal court in 2024.

Health care sharing plans work like a shared bank account, with members voluntarily contributing funds and payments being disbursed as needed to cover health care expenses. Under federal law, they must be registered as nonprofit organizations but are not considered formal health insurance.

The practice is common among Mennonites, Amish and anabaptists as well as other Christian groups. The alliance counts among its members the Colorado-based Samaritan Ministries.

The alliance claims that Colorado’s Health Care Sharing Plan Reporting Requirements Act, passed in 2022, requires health care sharing ministries to report members as well as statistics and financial information to the state.

According to the alliance, it should be treated like a church and granted the protections churches have. Therefore, the state’s rules are akin to monitoring a church’s congregants, how it preaches and how it markets itself and distributes the funds from its collection basket, the group said.

Gallagher did not buy that argument, finding instead that the law’s requirement that health care sharing ministries send an email with a spreadsheet of basic business information and marketing materials disseminated to third parties every year does not constitute detailed monitoring or close contact between the alliance and the state.

A requirement to disclose third parties involved with offering or enrolling participants “is quite different from a disclosure law obligating the NAACP to disclose its members’ identities against the backdrop of the Jim Crow South — which could and did subject members to reprisals, and thus created a risk of chilling association with the NAACP,” he added.

After Congress passed the Affordable Care Act in 2010, membership in health care sharing ministries increased, likely because they featured lower premiums then traditional insurers, Gallagher wrote.

The act also includes a carveout where health care sharing ministries are exempt from the law’s requirement of minimum essential insurance coverage.

Traditional health insurance plans have to spend at least 80% of premiums paying claims or on improving health care quality. They also have to cover preexisting conditions, pregnancy care, treatment for substance use disorders, and mental health care; health care sharing ministries are exempt from all of these requirements, Gallagher found.

Colorado’s recent rules regulating health care sharing ministries stem from growing consumer complaints around the country that marketing campaigns by health care sharing plans misled consumers to believe they were similar to comprehensive health insurance and that the plans chronically rejected or delayed paying claims members thought were reimbursable, Gallagher wrote.

Not only does Colorado have a legitimate government interest in regulating the healthcare sharing ministries, but the claim that the government is stifling the alliance’s ability to practice and speak about their religious beliefs by regulating their marketing material, which occasionally uses religious terms, is an effort to regulate commercial speech, not free expression, Gallagher found.

“Proposing commercial transactions in religious terms — or injecting other forms of protected speech into otherwise commercial appeals — does not necessarily remove speech in furtherance of that transaction from the ambit of the commercial speech doctrine or create an inextricable intertwinement issue,” Gallagher wrote. “Speech explaining the terms of a risk-sharing transaction to consumers for the purposes of persuading consumers to engage in this transaction is definitionally commercial.”

Representatives of the alliance declined to comment on the ruling.

Representatives of the Colorado Division of Insurance did not respond to requests for comment by press time.