House Ways and Means hears SB 890 to pause collections, study whether hospitals''captive insurers should be taxed

Summary

Lawmakers heard Senate Bill 890, which would impose a two‑year moratorium on collecting premium receipts tax from nonprofit hospitals while the Maryland Insurance Administration studies whether hospitals'use of captive insurers constitutes taxable insurance. Hospital representatives urged study; a whistleblower and advocacy groups said hospitals may owe millions.

The House Ways and Means Committee on April 2026 heard testimony on Senate Bill 890, a measure that would pause enforcement of Maryland''s 3% premium receipts tax for nonprofit hospitals for two years while the Maryland Insurance Administration (MIA) studies whether payments to captive insurers should be treated as taxable premiums.

Sen. Don Guile, the bill sponsor, told the committee the legislation is intended to resolve "a good faith dispute" over the tax''s application and "does not absolve any tax liability." He described captive insurance as a form of self‑insurance hospitals use to manage complex liabilities and said the moratorium would give regulators time to study the legal and practical issues before requiring retrospective payments.

Andrew Nicholas of the Maryland Hospital Association said hospitals and systems use captives because the commercial market cannot reliably underwrite certain large or specialized risks, including malpractice and cybersecurity exposures.…

House Ways and Means hears SB 890 to pause collections, study whether hospitals''captive insurers should be taxed

Summary

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