OLR Bill Analysis

HB 6468

AN ACT EXEMPTING MUNICIPALITIES FROM THE INSURANCE PREMIUM TAX.

SUMMARY:

This bill exempts all new and renewed health insurance plans sold to municipalities on or after July 1, 2009 from the 1. 75% premium tax paid by domestic insurance companies and HMOs. Current law exempts such plans covering municipal employees and their dependents from the tax only if sold by an HMO and through the Municipal Employee Health Insurance Plan (MEHIP).

EFFECTIVE DATE: July 1, 2009, and applicable to income years beginning on or after January 1, 2009

BACKGROUND

Premium Tax

By law, HMOs and domestic (Connecticut) and foreign insurers (those organized in another state) must pay an annual premium tax of 1. 75% per contract or policy sold in the state. There are numerous exemptions from the HMO premium tax, including contracts covering state employees; Medicare and Medicaid recipients; retired teachers; individuals eligible for a health coverage tax credit; and municipal employees and retirees, nonprofit employees, and community action agency employees covered through MEHIP.

Related Bill

HB 5670, reported favorably by the Insurance and Real Committee to the Finance, Revenue and Bonding Committee, has the same provisions as this bill.

COMMITTEE ACTION

Planning and Development Committee

Joint Favorable