Okla. Chamber of Commerce can't submit brief in tax issue

Jessica M. Karmasek Aug. 16, 2010, 3:24pm

OKLAHOMA CITY (Legal Newsline) - The Oklahoma Supreme Court has denied a request from the state's Chamber of Commerce to join a lawsuit protesting a 1-percent fee on health insurance plans.

In an order issued last week, the state's high court denied a request by the Oklahoma Chamber to submit a friend-of-the-court brief in a lawsuit filed by state Insurance Commissioner Kim Holland, according to The Oklahoman.

Last month, Holland filed a suit asking the court to decide whether a 1-percent fee on health insurance plans was a tax.

A revenue-generating measure must have three-fourths of the Legislature's vote to pass. House Bill 2437, which created the fee, did not get approval by three-fourths of all lawmakers, The Oklahoman said.

The fee was passed in the waning days of Oklahoma's legislative session and is expected to generate $78 million a year. The money would help fund the state's Medicaid program.

"We are asking the Supreme Court to allow us to voice the arguments of Oklahoma's business community against this very costly tax," Fred Morgan, president and CEO of the state Chamber, said in a statement last week.

"The Legislature and the governor's office have estimated that this new tax on health care benefits will raise $78 million. We estimate the cost to Oklahomans to be much higher when you consider the administrative expenses of trying to comply with this very poorly drafted legislation," he added.

In its request to submit briefs in the case, the state Chamber argued that the 1,282 businesses it represents would be directly impacted by the fee.

"There is no doubt that the sole purpose of this legislation is to raise revenue," Morgan said. "They can call it a fee or an 'access payment,' but it's clearly a tax designed to raise revenue. Moreover, this bill is not even designed to raise money to help the insurance commissioner run her agency. The tax revenues are to be spent for a totally separate purpose."

The fee, which is scheduled to take effect later this month, would be paid by insurance companies and businesses that pay for health insurance for employees. Holland's office would collect the fees.

"While the state Chamber supports the need to find a long-term source of funding for Medicaid, this tax is not it," Morgan said. "We must fight this tax increase with everything we have."

The court is still deciding whether it will hear the case.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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