Participant contributions

From the 2024 DOR Tax Exemption Study

48.14.0201(6)(d) - Participant contributions Description Participant contributions by employers participating in a self-funded multiple employer welfare arrangement (MEWA) preempted from state taxation via the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. Sec 1001, would be exempt from Washington’s insurance premiums tax. However, the U.S. Department of Labor has determined since 2005, via Advisory Opinion 2005-18A, that ERISA does not preempt Washington from assessing its premium tax on MEWAs. This exemption was intended to apply if either the U.S. Department of Labor issued an advisory opinion or a federal court issued a declaratory ruling, finding that ERISA preempted specific categories of MEWAs from the state’s premium tax solely due to the entity being a MEWA. Purpose To exempt participant contributions to MEWAs from premium tax if the U.S. Department of Labor or a federal court finds that ERISA preempts states from subjecting specific categories of MEWAs to state taxation. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.000 $0.000 $0.000 $0.000 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this e