HB 2467

84(R) - 2015
House Insurance
House Insurance

Vote Recommendation

  • Positive
  • Neutral
  • Neutral
  • Positive
  • Neutral


Phil King

Bill Caption

Relating to excluding certain premiums, revenues, and fees from the determination of certain insurers' taxable gross premiums or revenues; affecting certain taxes.

Fiscal Notes

Estimated Two-year Net Impact to General Revenue Related Funds for HB 2467, Committee Report 1st House, Substituted: a negative impact of ($45,148,000) through the biennium ending August 31, 2017. The negative fiscal impact represents a loss to the General Revenue Related Funds.

The PPACA requires U.S. health insurance providers to pay, in aggregate, $8 billion in fees in 2014, $11.3 billion in 2015 and 2016, $13.9 billion in 2017, and $14.3 billion in 2018. After 2018, fee revenue will grow at the rate of premium growth in the preceding year (assumed to be 4 percent in this analysis).

Based on data from the Kaiser Family Foundation, in 2013, Texas residents comprised 8.43 percent of all Americans covered by some form of health insurance. This analysis assumes health insurers offering coverage in Texas will pay 8.43 percent of the PPACA fee and the full amount of the fee will be passed on to Texas insureds through higher rates.

This analysis assumes fees paid in accordance with the PPACA in calendar 2014 and 2015 will be recovered in fiscal 2016 and thereafter, fees paid in any calendar year will be recovered in the succeeding state fiscal year.

Insurance maintenance taxes are deposited to GR Account 0036-Texas Department of Insurance Operating to fund the operations of the Texas Department of Insurance. As this is a self-leveling account, any reduction in maintenance taxes paid by health insurers will require an equivalent increase in maintenance tax paid by insurers in other lines of business. The bill would, therefore, have no effect on insurance maintenance tax revenue collected. As such, the analysis in the table shows only the effect on insurance premium tax.

No fiscal implication to units of local government is anticipated.

Bill Analysis

The bill would amend Chapters 222 and 257 of the Insurance Code to exclude additional premiums, revenues, or fees related to an insurer's recoupment of the health insurance providers fee imposed under Section 9010 of the federal Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, whether the premiums, revenues, or fees are stated separately or included in the rates charged for coverage, from the determination of an insurer's taxable gross premiums or a health maintenance organization's taxable gross revenues for the purposes of establishing premium and maintenance taxes, as applicable.

The bill would require the comptroller of public accounts to adopt rules necessary to implement the bill's provisions. The bill would apply only to a tax liability accruing on or after January 1, 2013.

Vote Recommendation Notes

This legislation is designed to take a stab at the ACA by providing relief to insurance companies and health maintenance organizations (HMOs) under Section 9010 of the ACA -- which would significantly reduce the financial burden on health insurers and consumers. We strongly support HB 2467 because it promotes our limited government and free market principles.

For more information on the ramifications of Section 9010, interested parties may wish to read two articles: here and here.

Organizations Supporting

Texas Association of Business
Texas Association of Health Plans