Oregon Premium Tax Becomes Effective October 1

August 5, 2009

Governor Kulongoski signed HB 2116 into law August 4, 2009.  The 75th Oregon Legislative Assembly passed this new health care tax bill before adjourning in June.  HB 2116 creates, among other things, a tax on medical insurance premiums as partial funding for increased access to healthcare.

Effective October 1, 2009, the bill calls for health carriers to remit one percent of the ‘gross premium amount’ paid by their insured members to the State of Oregon.  The tax is in effect through 2013. Funds generated by the premium tax will help expand healthcare access for the uninsured, including the expansion of the Oregon Health Plan to 35,000 uninsured, low-income adult Oregonians, as well as 80,000 uninsured Oregon children through a new program called “Health Care for All Oregon Children.”

Regence will implement this tax as follows:

• Oregon insured group, individual, Portability and Medicare supplement premium rates will increase to include the one percent tax beginning October 1, 2009.

• Regence Life & Health Insurance Company will increase premium for InterM (our individual short term medical plan option) on new policies written with effective dates on or after October 1, 2009.  Short term policies in force prior to October 1 will not be affected.

• Stand-alone dental plans are not subject to this premium tax.  Regence issues dental plan coverage as separate contracts, and will not add premium tax to group dental plan premiums.  Individual plans that include integrated dental benefits will pay tax based on the entire premium paid for the policy.

Premium bills will be adjusted to reflect the addition of the tax beginning with bills due for October 2009.   In addition, Regence will notify individual plan members of the tax in writing with reissued rate endorsements.  As always, we will share our customer messages with you.

• Individual, Portability and Medicare Supplement plan members will see the increase in their premium bills due for October.  Regence will notify individual plan members of the tax in writing. 

Regence understands that even a one percent increase has an impact on our insured policyholders.  This tax is not a long-term solution. Along with other Oregon insurers, Regence continues to work cooperatively with state and federal legislators, business leaders, and our health care partners to identify sustainable solutions for covering all Oregonians.

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