The federal Patient Protection and Affordable Care Act (PPACA), passed in March 2010, required states to establish health insurance exchanges (Exchange) by January 1, 2014, to facilitate the purchase of individual insurance and small employer group insurance, and provide access to premium tax credits and cost-sharing reductions for individuals with family incomes between 133 percent and 400 percent of the federal poverty level (FPL). Individuals with income below 133 percent have access to expanded Medicaid programs. Federal subsidies for individuals are only available through the Exchange, or through a federal basic health option in states that chose to have this option available for individuals with family income between 133 percent and 200 percent of the FPL.
The Washington State Health Benefit Exchange is a public-private partnership intended to:
The Exchange is required to be self-sustaining. This means it is capable of operating with revenue attributable to the operations of the Exchange. Self-sustaining sources of revenue include, but are not limited to federal grants, federal premium tax subsidies and credits, charges to health carriers, premiums paid by enrollees, and premium taxes.
Almost all businesses located or doing business in Washington are subject to the state business and occupation (B&O) tax. The B&O tax is imposed on the gross receipts of business activities conducted within the state. Revenues are deposited in the state general fund. The classification and rate of the B&O tax is based on the type of business activity. There are many exemptions for specific types of business activities, and certain deductions and credits are permitted under the B&O tax statutes. The B&O tax does not apply to any health maintenance organization, health care service contractor, or certified health plan in respect to premiums taxable under the 2 percent premium tax.
In 2013, the Exchange was exempted from B&O tax with a sunset date of July 1, 2023.
The Joint Legislative Audit and Review Committee reviewed this tax preference in July 2021, and recommended the preference be extended or the preference be made permanent.
This bill removes the sunset date of July 1, 2023.
No public hearing was held.