SHB 2073
IntroducedHouse
Health carrier surpluses
Addressing funding for health insurance premium assistance.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill requires nonprofit health insurance companies in Washington to report their annual surplus and, if it exceeds 600% of their required capital reserves, to pay 3% of the excess into a state fund that supports help with health insurance premiums for lower-income residents. It gives the Insurance Commissioner authority to review and adjust payments if a company can prove financial hardship.
- Requires nonprofit health insurance carriers to report their annual surplus to the Washington State Office of the Insurance Commissioner by July 1, 2026, and each year after.
- Sets a threshold for 'excessive surplus' as any amount over 600% of the carrier’s Risk-Based Capital (RBC) requirements.
- If a surplus is deemed excessive, the carrier must pay 3% of the excessive amount into the State Health Care Affordability Account by January 1, 2027, and annually thereafter.
- Allows carriers to request a hearing and ask for a reduced payment if they can prove the required payment would financially impair them.
- Authorizes the Insurance Commissioner to adopt rules to implement the new requirements.
Who is affected
- Nonprofit health carriers — Nonprofit health insurance companies operating in Washington must report their surplus annually and may be required to pay a portion of any 'excessive' surplus to a state fund, unless they can prove it would financially impair them.
- Residents seeking health insurance affordability assistance — Low- and moderate-income individuals and families who may receive help paying for health insurance premiums through a state-funded assistance program supported by this bill.
- Washington State Office of the Insurance Commissioner — The state agency responsible for regulating insurance and overseeing compliance with reporting and payment requirements related to surplus funds.
- State of Washington (General Government) — State government, which gains new authority to collect and administer funds for premium assistance, and may see increased budget flexibility for health access programs.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (4)
Creates a dedicated revenue stream to fund premium assistance for low- and moderate-income residents, directly reducing out-of-pocket health insurance costs for households earning up to ~400% FPL—potentially helping tens of thousands of Washingtonians afford coverage.
HealthcarePeopleRef: Sec. 2(3); RCW 43.71.130 (as referenced)The 3% levy on *excessive* surplus (i.e., capital above 600% of RBC) targets insurers with unusually high reserves, minimizing disruption to normal operations while capturing excess capacity that could otherwise be redirected to community benefit.
FinancialPeopleRef: Sec. 2(2)(b); Sec. 2(3)The hardship exception—requiring clear evidence of financial impairment and allowing a hearing—prevents the policy from destabilizing carriers facing genuine distress, preserving insurer solvency and market stability for enrollees.
Business & EmploymentPeopleRef: Sec. 2(4)(a)-(c)Aligns with the legislature’s stated goal of holding nonprofit insurers accountable to their mission of affordability and community benefit, reinforcing that “nonprofit” status should translate into tangible public value beyond legal form.
HealthcarePeopleRef: Sec. 2(1); Sec. 1
Potential Concerns (3)
Nonprofit health insurers may reduce services, freeze hiring, or delay investments to preserve capital in anticipation of potential surplus payments, especially smaller carriers near the threshold, potentially limiting consumer choice or innovation in coverage design.
Business & EmploymentPeopleRef: Sec. 2(3)The hearing process for carriers claiming financial impairment adds administrative complexity and potential delays, which could slow the disbursement of funds to the premium assistance program if carriers file timely but contested appeals, undermining program predictability.
Public SafetyLean peopleRef: Sec. 2(4)(a)-(b)The 600% RBC threshold is high relative to typical industry practice (e.g., RBC “action level” is 200%), meaning only carriers with unusually large surpluses—often those with strong financial health—will be subject to the payment, potentially disincentivizing prudent capital accumulation.
Business & EmploymentLean peopleRef: Sec. 2(2)(a)
Who Is Most Affected
Low- and moderate-income individuals and families who purchase coverage on the individual market or through small employers may receive premium subsidies. The benefit is targeted and direct: those earning ≤400% FPL (≈$62K single / $128K household) are most likely to qualify. This group is the primary intended beneficiary.
Most nonprofit insurers in Washington operate with surpluses well below 600% of RBC; only those with unusually high reserves (e.g., Kaiser Permanente WA, UnitedHealthcare’s nonprofit subsidiaries, or smaller carriers with conservative reserving) may be affected. Even then, the 3% levy on *excess* surplus is modest and can be offset by operational efficiencies or minor premium adjustments—unlikely to cause layoffs or benefit cuts.
The Office of the Insurance Commissioner gains new regulatory authority and funding stream, enhancing its capacity to monitor insurer financial health and administer a targeted affordability program. This strengthens oversight without expanding statutory mandates.
State government benefits from a new, self-funding mechanism for premium assistance—no general fund appropriation needed—while gaining flexibility to adjust program parameters via rulemaking. However, the state does not bear the fiscal risk: payments are contingent on carrier surplus levels.
Employers offering health coverage—especially small and mid-sized businesses—may benefit indirectly if the program reduces the number of employees enrolling in subsidized coverage, lowering employer-sponsored plan risk pools. However, no direct cost or benefit is imposed on them.