Minnesota Legislature
HF 2071
as introduced - 94th Legislature (2025 - 2026) Posted on 03/10/2025 02:45pm
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| Introduction | Posted on 03/07/2025 |
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A bill for an act
relating to taxation; insurance premium tax; modifying the tax on health insurers;
amending Minnesota Statutes 2024, sections 297I.01, subdivision 6a, by adding
a subdivision; 297I.05, subdivision 5; 297I.20, subdivision 1; repealing Minnesota
Statutes 2024, section 297I.01, subdivisions 4, 10, 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 297I.01, subdivision 6a, is amended to read:
Subd. 6a.
Direct business.
(a) "Direct business" means all insurance provided by an
insurance company or its agents, and specifically includes stop-loss insurance purchased
in connection with a self-insurance plan for employee health benefits or for other purposes,
but excludes:
(1) reinsurance in which an insurance company assumes the liability of another insurance
company; and
(2) self-insurance.
(b) For purposes of this subdivision, an insurance company includes a deleted text begin nonprofit health
service corporation, health maintenance organization, and community integrated service
networkdeleted text end new text begin health plan companynew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for premiums received after December
31, 2025.
new text end
Sec. 2.
Minnesota Statutes 2024, section 297I.01, is amended by adding a subdivision to
read:
new text begin Subd. 17. new text end
new text begin Health plan company. new text end
new text begin
"Health plan company" means a health plan company
as defined in section 62Q.01, subdivision 4; a county-based purchasing plan authorized
under section 256B.692; an integrated health partnership authorized under section 256B.0755;
and a group health plan sponsor. Notwithstanding the foregoing, health plan company does
not include a corporation as defined in section 317A.011, a nonprofit limited liability
company organized under section 322C.1101, or a foreign nonprofit entity.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for premiums received after December
31, 2025.
new text end
Sec. 3.
Minnesota Statutes 2024, section 297I.05, subdivision 5, is amended to read:
Subd. 5.
deleted text begin Health maintenance organizations, nonprofit health service plan
corporations, and community integrated service networksdeleted text end new text begin Health plan companiesnew text end .
(a)
A tax is imposed on deleted text begin health maintenance organizations, community integrated service
networks, and nonprofit health care service plan corporationsdeleted text end new text begin health plan companiesnew text end . The
rate of tax is equal to deleted text begin onedeleted text end new text begin ....new text end percent of gross premiums less return premiums on all direct
business received by the deleted text begin organization, network, or corporationdeleted text end new text begin health plan companynew text end or its
agents in Minnesota, in cash or otherwise, in the calendar year.
(b) The commissioner shall deposit all revenues, including penalties and interest, collected
under this chapter from deleted text begin health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporationsdeleted text end new text begin health plan companiesnew text end in the health
care access fund. Refunds of overpayments of tax imposed by this subdivision must be paid
from the health care access fund. There is annually appropriated from the health care access
fund to the commissioner the amount necessary to make any refunds of the tax imposed
under this subdivision.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for premiums received after December
31, 2025.
new text end
Sec. 4.
Minnesota Statutes 2024, section 297I.20, subdivision 1, is amended to read:
Subdivision 1.
Guaranty association assessment offsets.
(a) An insurance company
or health deleted text begin maintenance organizationdeleted text end new text begin plan companynew text end may offset against its premium tax liability
to this state any amount paid for assessments made for insolvencies under sections 60C.01
to 60C.22; and any amount paid for assessments under sections 61B.18 to 61B.32 as follows:
(1) Each such assessment shall give rise to an amount of offset equal to 20 percent of
the amount of the assessment for each of the five calendar years following the year in which
the assessment was paid.
(2) The amount of offset initially determined for each taxable year is the sum of the
amounts determined under clause (1) for that taxable year.
(b)(1) Each year the commissioner shall compare total guaranty association assessments
levied over the preceding five calendar years to the sum of all premium tax and corporate
franchise tax revenues collected from insurance companies and health deleted text begin maintenance
organizationsdeleted text end new text begin plan companiesnew text end , without reduction for any guaranty association assessment
offset in the preceding calendar year, referred to in this subdivision as "preceding year
insurance tax revenues."
(2) If total guaranty association assessments levied over the preceding five years exceed
the preceding year insurance tax revenues, insurance companies and health deleted text begin maintenance
organizationsdeleted text end new text begin plan companiesnew text end must be allowed only a proportionate part of the premium
tax offset calculated under paragraph (a) for the current calendar year.
(3) The proportionate part of the premium tax offset allowed in the current calendar year
is determined by multiplying the amount calculated under paragraph (a) by a fraction. The
numerator of the fraction equals the preceding year insurance tax revenues, and its
denominator equals total guaranty association assessments levied over the preceding five-year
period.
(4) The proportionate part of the premium tax offset that is not allowed must be carried
forward to subsequent tax years and added to the amount of premium tax offset calculated
under paragraph (a) prior to application of the limitation imposed by this paragraph.
(5) Any amount carried forward from prior years must be allowed before allowance of
the offset for the current year calculated under paragraph (a).
(6) The premium tax offset limitation must be calculated separately for (i) insurance
companies subject to assessment under sections 60C.01 to 60C.22, and (ii) insurance
companies or health deleted text begin maintenance organizationsdeleted text end new text begin plan companiesnew text end subject to assessment under
sections 61B.18 to 61B.32.
(7) When the premium tax offset is limited by this provision, the commissioner shall
notify affected insurance companies or health deleted text begin maintenance organizationsdeleted text end new text begin plan companiesnew text end
on a timely basis for purposes of completing premium and corporate franchise tax returns.
(8) The guaranty associations created under sections 60C.01 to 60C.22 and 61B.18 to
61B.32 shall provide the commissioner with the necessary information on guaranty
association assessments.
(c)(1) If the offset determined by the application of paragraphs (a) and (b) exceeds the
insurance company's or health deleted text begin maintenance organization'sdeleted text end new text begin plan company'snew text end premium tax
liability under this section prior to allowance of the credit for premium taxes, then the
insurance company or health deleted text begin maintenance organizationdeleted text end new text begin plan companynew text end may carry forward
the excess, referred to in this subdivision as the "carryforward credit" to subsequent taxable
years.
(2) The carryforward credit is allowed as an offset against premium tax liability for the
first succeeding year to the extent that the premium tax liability for that year exceeds the
amount of the allowable offset for the year determined under paragraphs (a) and (b).
(3) The carryforward credit must be reduced, but not below zero, by the amount of the
carryforward credit allowed as an offset against the premium tax under this paragraph. The
remainder, if any, of the carryforward credit must be carried forward to succeeding taxable
years until the entire carryforward credit has been credited against the insurance company's
or health deleted text begin maintenance organization'sdeleted text end new text begin plan company'snew text end liability for premium tax under this
chapter if applicable for that taxable year.
(d) When an insurer or health deleted text begin maintenance organizationdeleted text end new text begin plan companynew text end has offset against
taxes its payment of an assessment of the Minnesota Life and Health Guaranty Association,
and the association pays the insurer or health deleted text begin maintenance organizationdeleted text end new text begin plan companynew text end a
refund with respect to the assessment under section 61B.24, subdivision 6, then the refund
reduces the insurer's or health deleted text begin maintenance organization'sdeleted text end new text begin plan company'snew text end carryforward
credit under paragraph (c). If the refund exceeds the amount of the carryforward credit, the
excess amount must be repaid to the state by the insurers or health deleted text begin maintenance organizationsdeleted text end new text begin
plan companiesnew text end to the extent of the offset in the manner the commissioner requires.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for premiums received after December
31, 2025.
new text end
Sec. 5. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2024, section 297I.01, subdivisions 4, 10, and 11,
new text end
new text begin
are repealed.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for premiums received after December
31, 2025.
new text end
APPENDIX
Repealed Minnesota Statutes: 25-02078
297I.01 DEFINITIONS.
Subd. 4.
Community integrated service network.
"Community integrated service network" has the meaning given in section 62N.02, subdivision 4a.
Subd. 10.
Health maintenance organization.
"Health maintenance organization" has the meaning given in section 62D.02, subdivision 4.
Subd. 11.
Nonprofit health service plan corporation.
"Nonprofit health service plan corporation" has the meaning given in section 62C.02, subdivision 6.