Business
Suit claims WellPoint owes back taxes
NEWS IN BRIEF — Posted Dec. 13, 2004
A consumer group has filed a lawsuit against a California official seeking to force him to collect as much as $500 million in back taxes that it says should have been paid by WellPoint Health Networks since 1996.
The Foundation for Taxpayer and Consumer Rights, filing in Los Angeles County Superior Court, wants state Controller Steve Westly to direct WellPoint to pay on behalf of its subsidiary, Blue Cross of California.
The funds in question, if they had been paid, would have been comprised of taxes on gross premiums that are normally assessed on private health insurers, but for which WellPoint has been permitted exemptions.
A spokesman for Blue Cross of California, Michael Chee, said it has followed state tax laws and regulations, has been audited and believes it was declared to be in compliance.
The company in the past has said it pays state franchise fees on its PPO net income instead of paying the gross premium taxes, as other for-profit insurers in the state do.
Westly was unavailable for comment.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2004/12/13/bibf1213.htm.
