09/08/2009
Oregon's new premium tax law brings interpretations, discussion
We've interpreted Oregon's new premium tax law to mean that the taxable premium includes the premium paid for employees who live in Oregon, even if the group is insured under the jurisdiction of another state's regulatory agency (issued or issued for delivery in a state other than Oregon).
The new law does not apply to self-funded group plans. Our regulatory group in Oregon is working with that state's insurance division to clarify any implications for self-funded group plans.
Oregon-based groups will pay the tax based on their entire enrolled number of employees, regardless of where the employee resides. Effective Oct. 1, 2009, for employers who are based in Washington but have insured employees who reside in Oregon, Regence—not the employer—will be charged a 1% tax on the premium of those members.
Regence and other carriers, are in discussion with the Oregon regulator to determine how the applicable tax will be calculated. We want to ensure that the tax is applied only to the applicable Oregon resident premiums. We are concerned about how this tax reaches beyond Oregon. Our hope is that, by working with the regulator and other carriers, we can create an agreed-upon proposed solution that can be adopted by the Oregon legislature during its special session in early 2010. Until such a change is adopted by the legislature, Regence will implement and comply with the law as it is written.
If you have any questions, please talk to your Regence Sales contact.
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