RI 2026 H8191: Taxation - Personal Income Tax

Plain-English Summary

This legislation amends the Rhode Island personal income tax laws to facilitate data sharing between the Tax Administrator and the Rhode Island Health Benefits Exchange. Specifically, it allows the Tax Administrator to share the contact information (name, address, email, phone) of taxpayers who indicate on their return that they do not have health insurance coverage. This is intended to allow the Exchange to contact these individuals regarding enrollment options. The bill includes an "opt-out" provision for taxpayers who do not wish to be contacted and sets a sunset date for this authority, limiting it to tax years 2026 and 2027.

For younger readers

In Rhode Island, adults have to say on their tax forms if they have health insurance. This new rule says that if someone writes down that they don't have insurance, the tax office can give their name and phone number to the state group that helps people get insurance. This way, that group can call them to help them sign up. However, if the person doesn't want their name shared, they can check a box to say "no." This rule is temporary and the information must be deleted by the year 2030.

Who & Where It Applies

Impacted groups

Uninsured ResidentsTaxpayersRhode Island Health Benefits ExchangeTax AdministratorDepartment of Revenue

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Facilitates outreach to uninsured residents, potentially increasing healthcare coverage rates among vulnerable populations and strengthening the social safety net.
Utilizes existing government data to proactively identify those in need of services, making the delivery of public benefits more efficient and targeted.
Includes specific privacy safeguards and an opt-out mechanism, balancing the goal of universal coverage with respect for individual civil liberties.
Relies on a market-based insurance exchange solution rather than establishing a comprehensive public option or universal healthcare system.
The sunset clause limits the program to only two tax years, preventing a sustained, long-term systematic approach to identifying uninsured residents.
Sharing tax data between agencies, even with good intentions, may still raise concerns about government surveillance and privacy among marginalized communities.

For Conservatives

Includes a mandatory opt-out provision, ensuring that individuals can choose to keep their tax information private and avoid government contact.
Contains a strict sunset clause and data destruction mandate, ensuring the government power is temporary and does not result in a permanent database.
Utilizes data sharing to potentially reduce the number of uninsured individuals, which could theoretically lower uncompensated care costs absorbed by the state.
Expands the scope of government by allowing the use of private tax return data for non-tax purposes, which may be viewed as government overreach.
Strengthens the infrastructure surrounding the individual mandate and the state health exchange, which are often opposed by free-market advocates.
Creates additional administrative bureaucracy and coordination between state agencies, potentially increasing government complexity and cost.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 36 additions

It is enacted by the General Assembly as follows:

SECTION 1. Section 44-30-101 of the General Laws in Chapter 44-30 entitled "Personal Income Tax" is hereby amended to read as follows: 44-30-101. Requirements concerning qualifying health insurance coverage.

(a) Definitions. For purposes of this section:

(1) “Applicable individual” has the same meaning as set forth in 26 U.S.C. § 5000A(d).

(2) “Minimum essential coverage” has the same meaning as set forth in 26 U.S.C. § 5000A(f).

(3) “Shared responsibility payment penalty” means the penalty imposed pursuant to subsection (c) of this section.

(4) “Taxpayer” means any resident individual, as defined in § 44-30-5.

(b) Requirement to maintain minimum essential coverage. Every applicable individual must maintain minimum essential coverage for each month beginning after December 31, 2019.

(c) Shared responsibility payment penalty imposed for failing to maintain minimum essential coverage. As of January 1, 2020, every applicable individual required to file a personal income tax return pursuant to § 44-30-51, shall indicate on the return, in a manner to be prescribed by the tax administrator, whether and for what period of time during the relevant tax year the individual and his or her spouse and dependents who are applicable individuals were covered by minimum essential coverage. If a return submitted pursuant to this subsection fails to indicate that coverage was in force or indicates that any applicable individuals did not have coverage in force, a shared responsibility payment penalty shall hereby be assessed as a tax on the return.

(d) Shared responsibility payment penalty calculation. Except as provided in subsection (e), the shared responsibility payment penalty imposed shall be equal to a taxpayer’s federal shared responsibility payment for the taxable year under section 5000A of the Internal Revenue Code of 1986, as amended, and as in effect on the 15th day of December 2017.

(e) Exceptions.

(1) Penalty cap. The amount of the shared responsibility payment penalty imposed under this section shall be determined, if applicable, using the statewide average premium for bronze- level plans offered through the Rhode Island health benefits exchange rather than the national average premium for bronze-level plans.

(2) Hardship exemption determinations. Determinations as to hardship exemptions shall be made by the exchange under § 42-157-11.

(3) Religious conscience exemption determinations. Determinations as to religious conscience exemptions shall be made by the exchange under § 42-157-11.

(4) Taxpayers with gross income below state filing threshold. No penalty shall be imposed under this section with respect to any applicable individual for any month during a calendar year if the taxpayer’s household income for the taxable year as described in section 1412(b)(1)(B) of the Patient Protection and Affordable Care Act is less than the amount of gross income requiring the taxpayer to file a return as set forth in § 44-30-51.

(5) Out of state residents. No penalty shall be imposed by this section with respect to any applicable individual for any month during which the individual is a bona fide resident of another state.

(6) Individual on Medicaid. No penalty shall be imposed by this section with respect to any applicable individual who is enrolled in the Medicaid program through December 31, 2023.

(f) Health insurance market integrity fund. The tax administrator is authorized to withhold from any state tax refund due to the taxpayer an amount equal to the calculated shared responsibility payment penalty and shall place those amounts in the health insurance market integrity fund created pursuant to § 42-157.1-5.

(g) Deficiency. If, upon examination of a taxpayer’s return, the tax administrator determines there is a deficiency because any refund due to the taxpayer is insufficient to satisfy the shared responsibility penalty or because there was no refund due, the tax administrator may notify the taxpayer of the deficiency in accordance with § 44-30-81 and interest shall accrue on the deficiency as set forth in § 44-30-84. All monies collected on the deficiency shall be placed in the health insurance market integrity fund created pursuant to § 42-157.1-5.

(h) Application of federal law. The shared responsibility payment penalty shall be assessed and collected as set forth in this chapter and, where applicable, consistent with regulations promulgated by the federal government, the exchange, and/or the tax administrator. Any federal regulation implementing section 5000A of the Internal Revenue Code of 1986, as amended, and in effect on the 15th day of December 2017, shall apply as though incorporated into the Rhode Island code of regulations. Federal guidance interpreting these federal regulations shall similarly apply. Except as provided in subsections (j) and (k) of this section, all references to federal law shall be construed as references to federal law as in effect on December 15, 2017, including applicable regulations and administrative guidance that were in effect as of that date.

(i) Unavailability of federal premium tax credits. For any taxable year in which federal premium tax credits available pursuant to 26 U.S.C. § 36B become unavailable due to the federal government repealing that section or failing to fund the premium tax credits, the shared responsibility payment penalty under this section shall not be enforced.

(j) Imposition of federal shared responsibility payment. For any taxable year in which a federal penalty under section 5000A of the Internal Revenue Code of 1986 is imposed on a taxpayer in an amount comparable to the shared responsibility payment penalty assessed under this section, the state penalty shall not be enforced.

(k) Agency coordination. Where applicable, the tax administrator shall implement this section in consultation with the office of the health insurance commissioner, the office of management and budget, the executive office of health and human services, and the Rhode Island health benefits exchange.

(l) Data Sharing. (1) Information to be disclosed. The tax administrator, upon written request from the Rhode Island health benefits exchange, shall disclose to officers, employees, and contractors of the Rhode Island health benefits exchange, with respect to any applicable individual who indicated on a return that minimum essential coverage was not in force and did not opt out under subsection (l)(2) of this section:

(i) The name, age, mailing address, and other contact information, such as email address and phone number, if available, of such applicable individual.

(2) Opt-Out. Every applicable individual who indicates on a return that minimum essential coverage required by subsection (b) of this section was not in force shall also indicate on the return, in a manner prescribed by the tax administrator, whether the applicable individual wishes to opt out of being contacted directly by the Rhode Island health benefits exchange about enrollment in health coverage.

(3) Definition of applicable year. For purposes of this subsection, the term “applicable year” means the most recent taxable year for which information is available in the Rhode Island department of revenue’s taxpayer data information systems, or, if there is no return filed for such taxpayer for such year, the prior taxable year.

(4) Restriction on use of disclosed information. Return information disclosed under this subsection may be used only for the purposes authorized by this subsection and § 42-157-13.

(5) Privacy and Security. The Rhode Island health benefits exchange and the tax administrator shall develop a detailed set of data privacy and data security safeguards to govern the conveyance of data between their agencies under this section. With respect to information disclosed by the tax administrator to the Rhode Island health benefits exchange pursuant to this subsection, the Rhode Island health benefits exchange, its officers, employees, and contractors, shall be subject to § 44-30-95(c).

(6) Sunset. The authority of the tax administrator to disclose return information under subsection (l)(1) of this section shall apply only to tax years beginning on or after January 1, 2026, and ending on or before December 31, 2027. No return information shall be disclosed pursuant to subsection (l)(1) of this section with respect to any other tax years.

(i) The expiration of authority under subsection (l)(6) of this section shall not impair or limit the authority of the Rhode Island health benefits exchange to retain or use return information lawfully obtained under this section with respect to tax years beginning on or after January 1, 2026, and ending on or before December 31, 2027, for the purposes specified in subsection (l)(4) of this section through December 31, 2029. By January 1, 2030, the Rhode Island health benefits exchange shall delete and destroy all return information disclosed pursuant to subsection (l)(1) of this section from its system, files, and any databases.

SECTION 2. This act shall take effect upon passage.