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Bill

S 3634

Permits greater diversity in creation of new health sharing ministries and establishes and exempts certain mandates and reporting requirements.

2026-2027 Regular Session Introduced by Angela McKnight

The bill tightens oversight of health care sharing ministries by requiring audits, extensive public disclosures, and enforcement rules to ensure transparency and compliance in New

Introduced in the Senate, Referred to Senate Commerce Committee
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Bill Summary · S 3634

Bill Summary – S3634 (New Jersey, 222nd Legislature)

Main purpose and intent

  • This bill aims to diversify the creation of new health care sharing ministries (HCSMs) and tighten transparency around their operations. It also updates certain consumer protections by clarifying who is exempt from the state’s health insurance mandate when participating in an HCSM and establishing mandatory disclosure and reporting requirements for HCSMs operating or seeking to operate in New Jersey.

Key provisions and changes

  • Definition and scope of health care sharing ministries

    • HCSMs are not-for-profit organizations under 26 U.S.C. s.501(c)(3) that share common ethical or religious beliefs and have members who share medical expenses according to those beliefs, with membership maintained even after illness.
    • The bill requires annual audits by an independent CPA following Generally Accepted Accounting Principles (GAAP) and makes audit results publicly available upon request. Ministries that fail GAAP audit or do not undergo annual audit would be treated as non-compliant.

  • Exemption from minimum essential coverage (MEC) for certain participants

    • Under current law, participants in HCSMs established after December 31, 1999 are considered “applicable individuals” subject to New Jersey’s MEC requirements (i.e., health insurance coverage or tax penalties).
    • The bill proposes that participants in HCSMs established after 12/31/1999 will not be considered applicable individuals for MEC purposes, effectively exempting them from the state health insurance mandate and related tax penalties, subject to the proposed statutory framework.

  • Expanded and mandatory disclosures (reporting requirements)

    • HCSMs or organizations offering plans to residents must post on their websites, within 30 days after enactment and by March 1 annually thereafter, a comprehensive set of disclosures, including:
    • Total participants in-state (by calendar year) and total employer groups, with breakdowns.
    • National participation if applicable.
    • Provider contracts within New Jersey.
    • Financial metrics: admin expenses, reimbursement requests and approvals/denials, payments to in-state providers, and reimbursements to participants.
    • Denial rates and appeal totals for reimbursement requests.
    • Unreimbursed expenses that still qualify under plan criteria.
    • Anticipated participants for the next year, by category (individuals, households, employer groups, employees).
    • Geographic details (counties) and other states where the ministry operates.
    • Third-party relationships: list of non-insurance producers, training materials, and compensation/fees for marketing, enrollment, and administration.
    • Insurance producers involved, their numbers, materials, and compensation details.
    • All consumer-facing marketing materials and plan descriptions.
    • Contact information for the in-state liaison and a five-year history of parent companies or alternate names.
    • An organizational chart and a certification by an officer attesting accuracy.
    • Additional notice requirements: post a conspicuous statement that the plans are not health insurance and ensure participants are informed that personal data collected is protected.

  • Compliance and enforcement

    • The Director of the New Jersey Department of Law and Public Safety’s Division of Consumer Affairs can issue a notice of noncompliance for violations.
    • If noncompliance persists beyond 45 days after notice, the Director may pursue an injunction or levy monetary penalties.

  • Regulatory framework and effective date

    • The bill authorizes the Director to adopt rules under the Administrative Procedure Act to implement these provisions.
    • Effective date: 60 days after enactment, with the Director allowed to begin implementing actions in advance as needed.

Who/what would be affected

  • Patients and plan participants in New Jersey seeking or currently enrolled in HCSMs.
  • Health care sharing ministries and related organizations operating in New Jersey or marketing to New Jersey residents.
  • Employers and employer groups that participate in in-state HCSM plans.
  • Third-party marketers, non-insurance producers, and insurance producers associated with HCSMs, who would face enhanced disclosure and reporting requirements.
  • State agencies (Director of Consumer Affairs) responsible for compliance, enforcement, and rulemaking.

Procedural and timeline aspects

  • New reporting requirements become effective upon the act’s enactment, with initial disclosures due 30 days after enactment and annual disclosures due by March 1 each year thereafter.
  • The act provides for enforcement remedies (noncompliance notices, injunctions, penalties) and authorizes regulatory rules to be established via the Administrative Procedure Act.
  • The MEC exemption for HCSM participants hinges on the act’s definitions and pending regulatory implementation, with compliance standards to be set by the Director through rules.

Compiled from official sources — confirm details with the bill’s official record.

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