Opinion ID: 2283535
Heading Depth: 2
Heading Rank: 2

Heading: If Medi-Share Is An Insurance Company, It Should Fall Under the Religious Publication Exemption As Outlined in KRS 304.1-120(7).

Text: Additionally, I believe that Medi-Share substantially complies with the provisions outlined in KRS 304.1-120(7) and therefore would consider it exempt from state regulation. Under KRS 304.1-120(7), no provision of [the Kentucky Insurance Code] shall apply to: (7) A religious publication (as identified in this subsection), or its subscribers, that limit their operations to those activities permitted by this subsection, and: (a) Is a nonprofit religious organization; (b) Is limited to subscribers who are members of the same denomination or religion; (c) Acts as an organizational clearinghouse for information between subscribers who have financial, physical, or medical needs and subscribers who choose to assist with those needs, matching subscribers with the present ability to pay with subscribers with a present financial or medical need; (d) Pays for the subscribers' financial or medical needs by payments directly from one (1) subscriber to another; (e) Suggests amounts to give that are voluntary among the subscribers, with no assumption of risk or promise to pay either among the subscribers or between the subscribers and the publication; and (f) Provides the following verbatim written disclaimer as a separate cover sheet for all documents distributed by or on behalf of the exempt entity, including all applications, guidelines, promotional or informational materials, and all periodic publications: This publication is not issued by an insurance company nor is it offered through an insurance company. This publication does not guarantee or promise that your medical bills will be published or assigned to others for payment. Whether anyone chooses to pay your medical bills will be totally voluntary. This publication should never be considered as a substitute for an insurance policy. Whether you receive any payments for medical expenses, and whether or not this publication continues to operate, you will always remain liable for any unpaid bills. In denying Medi-Share the protection outlined in KRS 304.1-120(7), the majority makes much of sub-section (d), and particularly the fact that the subscribers of Medi-Share do not make payments directly to and from one another. The majority concludes that because the payments pass through an intermediary (Medi-Share), the payments fall short of being direct and thus finds the protections of KRS 304.1-120(7) undeserved. Common sense and the record before this Court demand that I recognize this procedure as a matter of fact. However, contrary to the holding of the majority, that procedure does not force the conclusion that the payments are not directly made from one subscriber to another. I am of the opinion that the intermediary in this case (Medi-Share) acts in a similar fashion as a trustee, a bank, an attorney, or an agent. Had the subscribers mailed their payments or instructed an agent to make the payment on their behalf, would the Court reach the same conclusion because the payment passed through a third party before reaching the intended beneficiary? I think the answer is clearly no. Thus, my thoughts on the matter are that Medi-Share is a conduit rather than an intermediary. Certainly, this Court would not hold that simply because one acts through an agent or via a trustee that one has not acted in a direct manner. Indeed, under the law controlling the principles of agency in this Commonwealth, we impugn upon the principal the acts of its agents as if they proceeded directly from the principal. See Preferred Risk Fire Ins. Co. v. Neet, 262 Ky. 257, 90 S.W.2d 39, 42 (1935) ( citing Union Mut. Ins. Co. v. Wilkinson, 80 U.S. 222, 13 Wall. 222, 20 L.Ed. 617 (1871)) (emphasis added). Medi-Share's function is no different, and the subscriber's payments are no less direct because they first pass through Medi-Share. It bears repeating that the extent of control that Medi-Share exercises in this case might set it apart from what is contemplated in KRS 304.1-120(7). However, I again analogize the actions of Medi-Share to that of an agent to principal relationship, whereby the agent (Medi-Share) is given discretionary authority to act on behalf of its principal (the subscribers). That discretion, however, should not make the actions any less direct. Furthermore, I believe this delegation and discretion is expressly contemplated by KRS 304.1-120(7)(c) which recognizes and allows the administration of these type of cost-sharing organizations to match[ ] subscribers with the present ability to pay with subscribers with a present financial or medical need. It seems to me that is exactly what we have here. I am of the opinion that Medi-Share is in substantial compliance with KRS 304.1-120(7) and the spirit of that rule. I would not strip that organization of the protections outlined in KRS 304.1-120(7) simply because payments are made at the direction of Medi-Share after subscribers have delegated this duty to Medi-Share, particularly when Medi-Share already statutorily possesses the authority to function in an administrative capacity. For the foregoing reasons, I respectfully dissent from the majority's opinion in this matter. CUNNINGHAM, J., joins.