The Washington State Court of Appeals ruled that Zion HealthShare, a medical cost-sharing nonprofit, is operating as an insurer, according to a Feb. 5 filing.
Zion HealthShare calls itself “an affordable, community-driven alternative to traditional health insurance.” Because Zion was established in 2018, though, it does not fall under the federal definition of a “healthcare sharing ministry,” which requires the organization to be in existence since Dec. 31, 1999. Zion argued this provision violated both state and federal constitutions.
Along with rejecting constitutional challenges, the court found Zion promised to pay eligible medical expenses, even if contingent on pooled funds from monthly member contributions. This promise is legally enforceable.
The appeals court sided with the Washington State Office of the Insurance Commissioner, calling on Zion to cease and desist its insurance business until it achieves registration. The agency also imposed a $50,000 fine, a 2% premium tax on member contributions, and penalties and interest on the tax.
