Congress tries to clar­ify which taxes to be ex­cluded from rev­enue

Modern Healthcare - - Late News -

The Demo­cratic chair­men of six con­gres­sional pan­els sent a let­ter to HHS clar­i­fy­ing the in­tent of a sec­tion of the health re­form law that out­lines which fed­eral taxes can be ex­cluded from health in­sur­ers’ rev­enue cal­cu­la­tions. These rev­enue cal­cu­la­tions are im­por­tant be­cause in­sur­ers have to meet stan­dards start­ing next year on how they spend mem­ber premi­ums. Un­der the law, health in­sur­ers must spend at least 85% of sub­scriber premi­ums on med­i­cal costs in group cov­er­age plans, and at least 80% of premi­ums on med­i­cal costs for in­di­vid­ual plans. While reg­u­la­tions on med­i­cal-loss ra­tios are still forth­com­ing from HHS, the six chair­men said the law’s in­tent is that only fed­eral taxes and fees “de­rived specif­i­cally from the pro­vi­sion of health in­surance cov­er­age” in the health re­form law can be ex­cluded from in­sur­ers’ rev­enue cal­cu­la­tions. How­ever, the Na­tional As­so­ci­a­tion of In­surance Com­mis­sion­ers, which plans to is­sue rec­om­men­da­tions on the med­i­cal-loss ra­tio pro­vi­sion, seems to dif­fer on in­ter­pre­ta­tion. One NAIC com­mit­tee al­ready rec­om­mended that all fed­eral taxes be ex­cluded in rev­enue cal­cu­la­tions ex­cept for in­vest­ment in­come taxes, said Brian Webb, man­ager of health pol­icy and leg­is­la­tion for the NAIC.

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