The bill amends RCW 48.14.0201 and adds a new section to chapter 48.14 RCW to change excise tax treatment for insurers. It raises the existing tax rate from 2 percent to 3 percent for “taxpayers” defined in the amended section (health maintenance organizations, health care service contractors, and self‑funded multiple employer welfare arrangements) for taxes due and payable beginning March 1, 2027. It also creates a new 1 percent tax on specified disability insurers and insurers that qualify for the group stop loss exemption, applying to premiums and prepayments for health care services (explicitly including certain dental and optometry services) for taxes due and payable beginning March 1, 2028. Collected moneys are generally deposited in the state general fund, except premiums for qualified health and dental plans sold through the Health Benefit Exchange that must be deposited into the health benefit exchange account. The bill makes several procedural and collection changes: annual taxes are due on or before March 1 of each year; taxpayers must make prepayments each year of 45 percent by June 15, 25 percent by September 15, and 25 percent by December 15, with the insurance commissioner required to notify taxpayers by June 1 and able to approve a smaller prepayment for good cause. A transfer of contracts for health care services moves the prepayment obligation to the transferee. Specific exemptions are preserved for federal Medicare Title XVIII prepayments, certain state prepayments for subsidized enrollees and the basic health plan, and participant contributions to self‑funded MEWAs that are not taxable in Washington. The state preempts counties, cities, towns, and other municipal subdivisions from imposing excise or privilege taxes on the specified premiums, effective January 1, 2000. For self‑funded MEWAs the bill confirms that taxes apply only to the extent they are not preempted by ERISA; MEWAs and the commissioner must seek an advisory opinion from the U.S. Department of Labor or a federal declaratory ruling on preemption. If legality is undetermined, affected MEWAs must deposit disputed taxes into an interest‑bearing escrow account beginning on the earlier of the date the fourth MEWA is certified by the commissioner or April 1, 2006, with transfer to the state treasurer if a final determination finds the taxes are not preempted. The act takes effect July 1, 2026. Some provisions in the extracted text are unclear or incomplete here: the chunk does not define “certified health plan,” portions of one subsection appear deleted in the source and their intent is not clear, and the new section includes two similar clauses that both begin “Each taxpayer must pay a tax…” without explanation of whether they apply to different groups or are duplicative. Many referenced definitions and terms are located in other RCWs and are not provided in these excerpts.

If enacted, health maintenance organizations, health care service contractors, and self-funded multiple employer welfare arrangements will face a higher state excise tax on premiums — rising from 2% to 3% for taxes payable beginning March 1, 2027 — which will increase their annual tax bills and could raise costs for plan sponsors or enrollees or reduce insurer margins. Separately, disability insurers and insurers that qualify for the group stop-loss exemption will have a new 1% tax on premiums and prepayments for health care services (including specified dental and optometry services) starting with taxes payable March 1, 2028. Those taxpayers must follow a cash-flow schedule of prepayments each year (45% by June 15, 25% by September 15, and 25% by December 15), though the insurance commissioner can approve smaller prepayments for good cause; most receipts go to the state general fund, but premiums for plans sold through the Health Benefit Exchange go into the exchange account. The law also blocks counties, cities, and other local governments from taxing these same premiums, reducing the chance of local duplicate levies, and assigns collection and notice responsibilities to the insurance commissioner and the state treasurer. Self-funded MEWAs face extra uncertainty and possible costs because their tax exposure depends on ERISA preemption; they must seek a federal advisory opinion or escrow tax payments until federal clarity, which could tie up funds or create legal risk. Some practical details are unclear from the provided text — for example, the bill’s references to “certified health plan,” a duplicated clause structure for the new tax, and portions showing deletions — so the precise scope and administration may require further clarification.