DC Council Approves New Tax to Pay for DC Exchange

May 13, 2014

On May 6, 2014, the DC Council voted unanimously to approve a new annual assessment to fund DC’s health insurance Marketplace, known as the DC Health Link.

Under the Affordable Care Act, all state-based Marketplaces must be financially self-sustaining by January 1, 2015.  States were given some leeway in determining how to finance operations, including the option to charge participating health insurance issuers assessments or user fees.  The Bill approved by the DC Council imposes a wide-ranging assessment on all health insurance carriers doing business in DC, including carriers who sell health-related products, such as disability, long-term care, dental, vision, and other supplemental lines of coverage.

During the comment period before the Bill was approved, many health insurance industry groups and carriers submitted formal comment letters voicing concerns and largely opposing the structure of the new Health Carrier Assessment (only two letters were in support).  The concerns include questioning the legal authority for allowing an assessment on carriers that do not sell through the DC Health Link and the expectation of legal challenges.  Keller will continue to update our DC clients on any developments regarding the proposed tax and its effect on group plan premiums.  If you have any questions in the meantime, please contact your Keller account team.