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SB 3250

AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX

2026 Regular Session Introduced by Melissa Murray

Rhode Island will share tax return data of uninsured individuals with HealthSource RI to enable targeted outreach and enforcement of health coverage, within a two-year window.

06/03/2026 Committee recommended measure be held for further study
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Bill Summary · SB 3250

Bill Summary: SB 3250 (Rhode Island, 2026)

Purpose and intent

  • The bill amends Rhode Island’s personal income tax code to formalize a mechanism for health insurance enrollment outreach. Specifically, it authorizes the Rhode Island Division of Taxation to provide the Rhode Island Health Benefits Exchange (HealthSource RI) with certain taxpayer contact information for individuals who indicate on their state tax return that they did not have minimum essential health coverage. The goal is to facilitate enrollment outreach and ensure compliance with health coverage requirements.

Key provisions and changes

1) Health coverage requirements and penalties (Section 44-30-101)

  • Minimum essential coverage (MEC): Applies to applicable individuals starting after December 31, 2019. Individuals must maintain MEC for each month.
  • Reporting on tax return: Beginning with tax year 2020, applicable individuals filing Rhode Island state tax returns must indicate on the return whether they and their spouse/dependents had MEC during the relevant tax year. If coverage was not in force or not properly indicated, a “shared responsibility payment penalty” may be assessed as a tax on the return.

2) Shared responsibility payment penalty (SCRP)

  • Calculation: Generally aligns with the federal SCRP under 26 U.S.C. 5000A (as in effect December 15, 2017), with codified exceptions and adjustments.
  • Exceptions and adjustments:
    • Penalty amount capped using the statewide average premium for bronze-level plans offered through Rhode Island’s health benefits exchange (not the national average).
    • Hardship and religious conscience exemptions determined by the exchange (HealthSource RI) under specified provisions.
    • No penalty if household income is below Rhode Island’s filing threshold.
    • No penalty for out-of-state bona fide residents.
    • No penalty for individuals enrolled in Medicaid through December 31, 2023.

3) Revenue handling and enforcement

  • Health insurance market integrity fund: The SCRP amounts may be withheld from state tax refunds and allocated to this fund.
  • Deficiency process: If a tax deficiency arises related to SCRP collection, standard deficiency procedures apply, with funds deposited into the health insurance market integrity fund.

4) Coordination with federal law and agencies

  • The SCRP is to be assessed and collected consistent with applicable federal law, regulations, and guidance as of December 15, 2017, where applicable.
  • The act contemplates coordination among the Tax Administrator, 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.

5) Data sharing with HealthSource RI (Section 44-30-101(l))

  • Disclosures: The Tax Administrator can disclose certain return information to HealthSource RI for individuals who indicated they did not have MEC, specifically name, age, contact information, and related data.
  • Opt-out option: Individuals can opt out of being contacted directly by HealthSource RI.
  • Scope and timing: Data sharing authority applies to tax years beginning on/after January 1, 2026 and ending on/before December 31, 2027 (sunset of disclosure authority).
  • Privacy and security: Requires safeguards and governs use of disclosed information.
  • Retention and destruction: HealthSource RI must retain disclosed data for purposes stated, with deletion/destruction required by January 1, 2030.

Who is affected

  • Taxpayers with Rhode Island personal income tax obligations who report MEC status on their state return.
  • HealthSource RI (Rhode Island Health Benefits Exchange) as the recipient and outreach/ enrolment agency for uninsured residents.
  • Rhode Island Department of Revenue (Tax Administrator) for administration, data sharing, and enforcement of SCRP.
  • Other state health/ budget agencies via coordinated implementation (as listed in the bill).

Timeline and effective date

  • Effective date: The act takes effect upon passage.
  • Data sharing window: The authority to disclose return information to HealthSource RI is limited to tax years 2026 and 2027, with broader data protections and eventual deletion by 2030.

Practical impact

  • The bill creates a state-level mechanism to align health coverage obligations with enforcement through the personal income tax system.
  • It enables HealthSource RI to target outreach to Rhode Island residents who report uninsured status on their tax returns, potentially increasing insurance enrollment.
  • It introduces a Rhode Island-specific cap on SCRP penalties (based on state bronze-plan premiums) and clarifies exemptions.
  • It requires careful data privacy and security measures due to the cross-agency data sharing between tax and health benefits agencies, with a narrow two-year window for data sharing.

This summary provides the bill’s core objectives, major provisions, likely stakeholders, and key procedural aspects for readers seeking a concise, nonpartisan understanding.

Compiled from official sources — confirm details with the bill’s official record.

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