Orlando, Fla.–State regulators have been asked to investigate what an insurance trade group says is a tax exemption abuse by some state workers' compensation funds.
The request by the Property Casualty Insurers Association of America (PCI), Des Plaines, Ill., was made to the National Association of Insurance Commissioners at the NAIC spring meeting here during a session of the organization's Tax Policy working group.
Steve Broadie, a PCI representative, raised the issue regarding a federal tax exemption for state workers' compensation funds.
He said the exemption in the Internal Revenue Code is not an issue as long as there is clarity that it is for entities that are single state writers, accept "all comers," and are a market of last resort.
But, he said, "there are state funds that are using the exemption inappropriately to subsidize competition in the workers' comp market." He asked regulators to further investigate this issue.
In other discussion at the working group session Georgia Insurance Commissioner John Oxendine warned that a "just do nothing" approach to health care tax issues is a sure way to arrive at national health care.
He said a federally run health insurance system "would be the worst thing that could happen to our children and grandchildren."
What needs to happen, according to Mr. Oxendine, is that Americans must be encouraged to buy into health insurance and realize that the $15 co-pay in many cases does not come near covering the cost of insurance.
That incentive can come in the form of tax incentives to help families with health savings accounts and other kinds of health care savings programs, he said. "We need to support any consumer-driven product." In Georgia, Mr. Oxendine said, bills such as the one that exempts health care spending accounts from state premium taxes are being pursued.
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