This bill proposes a temporary increase in insurance premium taxes on insurers to fund health insurance premium assistance. Specifically, it amends RCW 48.14.020 and RCW 48.14.0201 to adjust the tax rate on premiums from 2% to 2.75% for the calendar year 2026, and then back to 2% for 2027 and thereafter. Additionally, it establishes that any portion of the taxes exceeding 2% will be deposited into the state health care affordability account to support premium assistance and cost-sharing reduction programs. The bill also includes provisions that ensure these excess taxes cannot be passed on to enrollees unless the insurance commissioner determines it poses a risk of insolvency or consumer harm.

Furthermore, the bill outlines the tax obligations for health maintenance organizations and health care service contractors, specifying that they must pay a tax based on their collected premiums and prepayments. For the year 2026, the tax rate for these entities will also be temporarily increased to 2.75%. The legislation emphasizes that any excess taxes collected beyond the 2% threshold must be borne solely by the taxpayer and cannot be transferred to enrollees. This comprehensive approach aims to enhance funding for health insurance assistance while maintaining protections for consumers.

Statutes affected:
Original bill: 48.14.020, 48.14.0201