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The Kansas Legislature passed Senate Bill 368, also called the “Health Care Sharing Ministries Tax Deduction Act”. The bill creates a new Kansas state income tax deduction for qualifying health care sharing ministry members beginning with the 2027 tax year. The bill was vetoed by Governor Laura Kelly, but the Kansas Legislature overrode the veto, allowing the bill to move forward.
This is a big deal for Kansas residents who use a health share! It could also become a bigger deal nationally if other states follow Kansas’ lead (which I hope they do).
What the New Kansas Law Does
Starting with tax years beginning after December 31, 2026, qualifying Kansas residents may be able to subtract certain health care sharing expenses from their Kansas taxable income.
The deduction is capped at:
- $5,000 per year for an individual
- $10,000 per year for a married couple filing jointly
The law applies to qualified health care sharing expenses, which can include amounts paid for membership in a health care sharing ministry, monthly sharing contributions, and administrative fees.
The law also says that qualified health care shares received by a qualified individual and used for medical expenses are not considered taxable income for Kansas income tax purposes. Which makes sense because if a health share member receives money to help with eligible medical bills, Kansas is making it clear that those shared amounts should not be treated like regular taxable income under the state income tax rules.
Who Qualifies?
The bill does not appear to name specific health share organizations. Instead, it defines what counts as a health care sharing ministry.
Under the law, a qualifying organization must be a nonprofit organization that is exempt from federal income tax under 501(c)(3). It must also limit membership to people who share a common set of ethical or religious beliefs, facilitate sharing among members with financial or medical needs, provide quarterly statements, complete an annual independent CPA audit, and clearly state that it is not insurance.
Kansas is not saying “every health share automatically qualifies.” The organization has to meet the state’s definition. But if you look at the biggest health shares today, most of them are going to qualify.
Why This Matters for Health Share Members
This law recognizes something that health share members already know: A health share can be a real, practical way for families to handle large medical bills without using traditional health insurance.
Health shares are not insurance. They do not work like insurance. Members still need to read the guidelines and understand what types of medical bills are eligible for sharing.
But for the right person or family, a health share can be a much more affordable way to manage healthcare costs.
That is especially true for people who are self-employed, small business owners, freelancers, independent contractors, or families buying their own healthcare.
These are the people who often feel stuck.
They may not have access to affordable employer benefits. They may not qualify for enough financial help through the ACA marketplace. Or they may simply be tired of paying high monthly costs for a system that still feels expensive when they actually need care.
Kansas is now giving some of those families a tax advantage for choosing a different model.
That is worth paying attention to.
Why This Could Matter Beyond Kansas
The bigger story here is not just Kansas.
The bigger story is what this could signal for health shares in other states.
For years, health share members have paid their monthly contributions without the same tax treatment that many people associate with traditional health insurance. This Kansas law does not change the federal rules, and it does not make health shares the same as insurance.
But it does show that a state can recognize health care sharing ministries in the tax code.
If more states look at this model, health share members in other places could eventually see similar tax advantages.
And that could make health shares even more appealing for people who are trying to lower their monthly healthcare costs while still having a plan for larger, unexpected medical bills.
Why This Is Especially Helpful for Self-Employed People
Self-employed people often get the worst deal in the healthcare system. When you work for yourself, there is no HR department choosing benefits for you. There is no employer paying part of the monthly cost. You have to figure it out yourself.
That is why health shares are already appealing to many small business owners and self-employed families.
They want a lower monthly cost. They want more flexibility. They want to be able to work directly with their doctors. They want an option that does not feel like they are paying more and more every year for less control.
For a Kansas family using a qualifying health share, being able to deduct up to $10,000 from Kansas taxable income could make their healthcare strategy even more affordable.
My Take
I am very excited about this, and ultimately I think this is a change in the right direction when it comes to American healthcare.
But because families should have more than one way to pay for healthcare.
Traditional health insurance is not working well for a lot of people, especially small business owners and self-employed families. Health shares give many of those families another option.
Kansas is recognizing that.
And if this encourages other states to take health shares more seriously, that could be a good thing for members across the country.
Quick Disclaimer for Kansas Residents
This article is for educational purposes only and is not tax advice.
If you live in Kansas and are part of a health share, talk with a qualified tax professional before claiming this deduction. You will also want to watch for guidance from the Kansas Department of Revenue as the 2027 tax year gets closer.
Health shares are not insurance and do not offer insurance coverage. Membership in a health share does not guarantee the payment or reimbursement of medical expenses. Each organization operates under its own membership guidelines, which determine what expenses may be eligible for sharing. This publication is for informational purposes only and is not provided by an insurance company. For state-specific notices and full program details, please visit the respective health share’s official website.
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