Connecticut Lawmakers Seek Clarification on Health Insurance Provider Fee
Connecticut Lawmakers Seek Clarification on Health Insurance Provider Fee
- AuthorsCourtney, Rep. JoeDeLauro, Rep. Rosa L.Himes, Rep. James A.
- Institutional AuthorsHouse of Representatives
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2013-4496
- Tax Analysts Electronic Citation2013 TNT 39-23
February 11, 2013
The Honorable Kathleen Sebelius
Secretary
Department of Health and Human Services
200 Independence Avenue SW
Washington, DC 20201
The Honorable Neal Wolin
Acting Secretary
Department of Treasury
1500 Pennsylvania Avenue NW
Washington, DC 20220
Dear Secretary Sebelius and Acting Secretary Wolin:
Thank you once again for the diligent work of you and your staff in implementing the Affordable Care Act (ACA). After a conference call last week with staff at HHS, we are writing to ask for clarification on a section of the law that will have a significant impact on consumers: the insurance provider fee, also known as the Health Insurance Tax.
As you know, the Affordable Care Act created an insurance provider fee beginning in 2014. For health policies that renew before 2014, the industry fees are already being incorporated in 2013 premiums. And, according to rate filings in Connecticut and around the country, some insurers are seeking to entirely pass these fees through to consumers in the form of higher premiums.
Based on our conversations with staff at the House Ways and Means Committee, and our review of the statutory language, such a pass-through is not consistent with the clear language of the ACA. The insurance provider fee is levied only on insurance providers. The fee is not a sales tax, nor a premium tax, despite claims to the contrary. If the intent of the provider fee was to be a tax on premiums, which is what we have seen asserted in rate filings in Connecticut and around the country, then it would have been written in the law. Indeed, in the State of California such a "pass-through" claim was rejected by the state insurance department who recognized that the tax incidence on insurance providers is not as simple as a cost shift to consumers. We are therefore writing to ask for your respective departments' interpretation of the insurance provider fee, and whether the administration regards this fee as a pass-through to be borne entirely by the consumer, or not.
Thank you for your attention to this matter and if you have any follow up questions, please do not hesitate to contact us or our staff.
Member of Congress
Rosa DeLauro
Member of Congress
James Himes
Member of Congress
- AuthorsCourtney, Rep. JoeDeLauro, Rep. Rosa L.Himes, Rep. James A.
- Institutional AuthorsHouse of Representatives
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2013-4496
- Tax Analysts Electronic Citation2013 TNT 39-23