Health insurance premium tax

AN ACT Relating to increasing the insurance premium tax on 1
certain health insurance providers; amending RCW 48.14.0201; adding a 2
new section to chapter 48.14 RCW; and providing an effective date.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 48.14.0201 and 2025 c 423 s 103 are each amended to 5
read as follows: 6
(1) As used in this section, "taxpayer" means a health 7
maintenance organization as defined in RCW 48.46.020, a health care 8
service contractor as defined in chapter 48.44 RCW, or a self-funded 9
multiple employer welfare arrangement as defined in RCW 48.125.010.10
(2) Each taxpayer must pay a tax on or before the first day of 11
March of each year to the state treasurer through the insurance 12
commissioner's office. ((The)) For taxes due and payable beginning 13
March 1, 2027, the tax must be equal to the total amount of all 14
premiums and prepayments for health care services collected or 15
received by the taxpayer under RCW 48.14.090 during the preceding 16
calendar year multiplied by the rate of ((two)) three percent. For 17
tax purposes, the reporting of premiums and prepayments must be on a 18
written basis or on a paid-for basis consistent with the basis 19
required by the annual statement. 20
H-2890.2
HOUSE BILL 2626
State of Washington 69th Legislature 2026 Regular Session
By Representatives Parshley, Scott, and Macri
Read first time 01/22/26. Referred to Committee on Finance.
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(3) Taxpayers must prepay their tax obligations under this 1
section. The minimum amount of the prepayments is the percentages of 2
the taxpayer's tax obligation for the preceding calendar year 3
recomputed using the rate in effect for the current year. For the 4
prepayment of taxes due during the first calendar year, the minimum 5
amount of the prepayments is the percentages of the taxpayer's tax 6
obligation that would have been due had the tax been in effect during 7
the previous calendar year. The tax prepayments must be paid to the 8
state treasurer through the commissioner's office by the due dates 9
and in the following amounts: 10
(a) On or before June 15, 45 percent; 11
(b) On or before September 15, 25 percent; 12
(c) On or before December 15, 25 percent. 13
(4) For good cause demonstrated in writing, the commissioner may 14
approve an amount smaller than the preceding calendar year's tax 15
obligation as recomputed for calculating the health maintenance 16
organization's, health care service contractor's, self-funded 17
multiple employer welfare arrangement's, or certified health plan's 18
prepayment obligations for the current tax year. 19
(5)(a) Except as provided in (b) of this subsection, moneys 20
collected under this section are deposited in the general fund.21
(b) Beginning January 1, 2014, moneys collected from taxpayers 22
for premiums written on qualified health benefit plans and qualified 23
dental plans offered through the health benefit exchange under 24
chapter 43.71 RCW must be deposited in the health benefit exchange 25
account under RCW 43.71.060. 26
(6) The taxes imposed in this section do not apply to:27
(a) Amounts received by any taxpayer from the United States or 28
any instrumentality thereof as prepayments for health care services 29
provided under Title XVIII (medicare) of the federal social security 30
act. 31
(b) Amounts received by any taxpayer from the state of Washington 32
as prepayments for health care services provided under:33
(i) The medical care services program as provided in RCW 34
74.09.035; or 35
(ii) The Washington basic health plan on behalf of subsidized 36
enrollees as provided in chapter 70.47 RCW. 37
(c) ((Amounts received by any health care service contractor as 38
defined in chapter 48.44 RCW, or any health maintenance organization 39
as defined in chapter 48.46 RCW, as prepayments for health care 40
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services included within the definition of practice of dentistry 1
under RCW 18.32.020, except amounts received for pediatric oral 2
services that qualify as coverage for the minimum essential coverage 3
requirement under P.L. 111-148 (2010), as amended, and for stand-4
alone family dental plans as defined in RCW 43.71.080(4)(a), only 5
when offered in the individual market, as defined in RCW 48.43.005, 6
or to a small group, as defined in RCW 48.43.005. 7
(d))) Participant contributions to self-funded multiple employer 8
welfare arrangements that are not taxable in this state.9
(7) Beginning January 1, 2000, the state preempts the field of 10
imposing excise or privilege taxes upon taxpayers and no county, 11
city, town, or other municipal subdivision has the right to impose 12
any such taxes upon such taxpayers. This subsection is limited to 13
premiums and payments for health benefit plans offered by health care 14
service contractors under chapter 48.44 RCW, health maintenance 15
organizations under chapter 48.46 RCW, and self-funded multiple 16
employer welfare arrangements as defined in RCW 48.125.010. The 17
preemption authorized by this subsection must not impair the ability 18
of a county, city, town, or other municipal subdivision to impose 19
excise or privilege taxes upon the health care services directly 20
delivered by the employees of a health maintenance organization under 21
chapter 48.46 RCW. 22
(8)(a) The taxes imposed by this section apply to a self-funded 23
multiple employer welfare arrangement only in the event that they are 24
not preempted by the employee retirement income security act of 1974, 25
as amended, 29 U.S.C. Sec. 1001 et seq. The arrangements and the 26
commissioner must initially request an advisory opinion from the 27
United States department of labor or obtain a declaratory ruling from 28
a federal court on the legality of imposing state premium taxes on 29
these arrangements. Once the legality of the taxes has been 30
determined, the multiple employer welfare arrangement certified by 31
the insurance commissioner must begin payment of these taxes.32
(b) If there has not been a final determination of the legality 33
of these taxes, then beginning on the earlier of (i) the date the 34
fourth multiple employer welfare arrangement has been certified by 35
the insurance commissioner, or (ii) April 1, 2006, the arrangement 36
must deposit the taxes imposed by this section into an interest 37
bearing escrow account maintained by the arrangement. Upon a final 38
determination that the taxes are not preempted by the employee 39
retirement income security act of 1974, as amended, 29 U.S.C. Sec. 40
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1001 et seq., all funds in the interest bearing escrow account must 1
be transferred to the state treasurer. 2
(9) The effect of transferring contracts for health care services 3
from one taxpayer to another taxpayer is to transfer the tax 4
prepayment obligation with respect to the contracts.5
(10) On or before June 1st of each year, the commissioner must 6
notify each taxpayer required to make prepayments in that year of the 7
amount of each prepayment and must provide remittance forms to be 8
used by the taxpayer. However, a taxpayer's responsibility to make 9
prepayments is not affected by failure of the commissioner to send, 10
or the taxpayer to receive, the notice or forms. 11
NEW SECTION. Sec. 2. A new section is added to chapter 48.14 12
RCW to read as follows: 13
(1) For the purposes of this section, "taxpayer" means a 14
disability insurer as regulated in chapter 48.20 or 48.21 RCW or is 15
an insurer that qualifies for the group stop loss insurance exemption 16
under RCW 48.21.015. 17
(2)(a) Each taxpayer must pay a tax on or before the first day of 18
March of each year to the state treasurer through the insurance 19
commissioner's office. Beginning with taxes due and payable March 1, 20
2028, the tax must be equal to the total amount of all premiums and 21
prepayments for health care services, including services included 22
within the practice of dentistry under RCW 18.32.020 and the practice 23
of optometry under RCW 18.53.010, collected or received by the 24
taxpayer under RCW 48.14.090 during the preceding calendar year 25
multiplied by the rate of one percent. 26
(b) Each taxpayer must pay a tax on or before the first day of 27
March of each year to the state treasurer through the insurance 28
commissioner's office. Beginning with taxes due and payable March 1, 29
2028, the tax is equal to the total amount of all premiums and 30
prepayments for group stop loss insurance-related health care 31
services collected or received by the taxpayer under RCW 48.14.090 32
during the preceding calendar year multiplied by the rate of one 33
percent. 34
(3) Taxpayers must prepay their tax obligations under this 35
section. The minimum amount of the prepayment is the percentages of 36
the taxpayer's tax obligation for the preceding calendar year 37
recomputed using the rate in effect for the current year. For the 38
prepayment of taxes due during the first calendar year, the minimum 39
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amount of the prepayment is the percentages of the taxpayer's tax 1
obligation that would have been due had the tax been in effect during 2
the previous calendar year. The tax prepayments must be paid to the 3
state treasurer through the commissioner's office by the due dates 4
and in the following amounts: 5
(a) On or before June 15th, 45 percent; 6
(b) On or before September 15th, 25 percent; and7
(c) On or before December 15th, 25 percent. 8
NEW SECTION. Sec. 3. This act takes effect July 1, 2026.9
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