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Oklahoma high court blocks The State Chamber from insurance lawsuit

Oklahoma's insurance commissioner has asked the state Supreme Court to decide whether a new fee on health care constitutes a tax. The State Chamber sought to file a brief in the case because the fee will affect many of its members.
BY JULIE BISBEE Published: August 13, 2010

The state Supreme Court has denied a request from a business advocacy group to join a lawsuit protesting a 1 percent fee on health insurance plans.

In an order issued Thursday, the state Supreme Court denied a request by The State Chamber to submit "friend of the court briefs" in a lawsuit filed by Insurance Commissioner Kim Holland. Last month, Holland filed a lawsuit asking the Supreme 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.

Funds for Medicaid

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

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. The fee, which is scheduled to take effect Aug. 27, would be paid by insurance companies and businesses that pay for health insurance for employees.

Holland's office would collect the fees.

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

Arguments were made last week to a Supreme Court referee.