HB 114 — Gross Premiums Tax/PHPs.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 12 HOUSE BILL 114* Committee Substitute Favorable 2/27/19 Short Title:

Gross PremiumPremiums Tax/PHPs.

Representatives Lambeth, Dobson, and Howard (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Insurance, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House February 21, 2019 A BILL TO BE ENTITLED AN ACT TO SUBJECT PREPAID HEALTH PLANS LICENSED BY THE DEPARTMENT OF INSURANCE TO THE GROSS PREMIUMPREMIUMS TAX.

Taxes"Taxes Upon Insurance Companies.Companies and Prepaid Health Plans." SECTION 1.(b) G.S.

(1a)(2)(2) CaptiveCapitation insurancepayment. company.

– As defined in 42 C.F.R.

§ 438.2.

(1a)(3) Captive insurance company.

(3) Capitation payment.

– As defined in 42 CFR 438.2.

(6) Prepaid Healthhealth Plan.plan.

*H114-v-1* General Assembly Of North Carolina Session 2019 (b) Tax Base.

– *H114-v-2* General Assembly Of North Carolina Session 2019 (1) Insurers.

(2) Repealed bySessionby Session Laws 2006-196, effective for taxable years beginning on or after January 1, 2008.

Gross premiums from business done in this State for all other health care plans and contracts of insurance, including contracts of insurance required to be carried by the Workers' Compensation Act, means all premiums written during the calendar year, or the equivalent Page 2 House Bill 114*-First Edition General Assembly Of North Carolina Session 2019 thereof in the case of self-insurers under the Workers' Compensation Act, for contracts covering Page 2 House Bill 114*-Second Edition General Assembly Of North Carolina Session 2019 property or risks in this State, other than for contracts of reinsurance, whether the premiums are designated as premiums, deposits, premium deposits, policy fees, membership fees, or assessments.

Medicaid or NC Health Choice premiums, other than capitation payments, paid by or on behalf of a Medicaid or NC Health Choice beneficiary.

– The tax rate to be applied to gross premiums from capitation payments received by prepaid health plans is one and nine-tenths percent (1.9%).

Up to twentypercent (20%), as determined in accordance with House Bill 114*-First114*-Second Edition Page 3 General Assembly Of North Carolina Session 2019 G.S.

fire, farm owners multiple peril, homeowners multiple peril, nonliabilityportion ofcommercialofcommercialmultipleperil,oceanmarine,inland multipleperil,oceanmarine,inland marine, earthquake, private passenger automobile physical damage, commercial automobile physical damage, aircraft, and boiler and machinery.

105-228.4A." SECTION 2.1.(d) G.S.

58-6-25 reads as rewritten:

"§ 58-6-25.

Insurance regulatory charge.

… Page 4 House Bill 114*-Second Edition General Assembly Of North Carolina Session 2019 (e) Definitions.

– The following definitions apply in this section:

… (2) Insurance company.

– A company or prepaid health plan that pays the gross premiums tax levied in G.S.

105-228.5 and G.S.

105-228.8.

…." SECTION 2.

Page 4 House Bill 114*-First Edition General Assembly Of North Carolina Session 2019 SECTION 3.

House Bill 114*-First114*-Second Edition Page 5