Manatt Successfully Represents Blue Shield of California in Appellate Litigation Victory

Manatt successfully represented Blue Shield of California in an appellate opinion confirming that Blue Shield, and three other major health plans, are not insurers and therefore cannot be assessed the Gross Premium Tax paid by insurers in California. The April 24, 2023 appellate decision from the Second District of the California Court of Appeal affirmed the Superior Court’s grant of summary judgment in favor of Blue Shield. Blue Shield is represented by Manatt partners Gregory Pimstone, Ronald Turovsky and Joanna McCallum.

In Myers v. California State Board of Equalization, et. al., the plaintiff asserted that Blue Shield and three other major health care service plans should have been taxed as insurers, which pay a Gross Premium Tax. Blue Shield and other health plans have never been assessed the Gross Premium Tax, and instead paid a Franchise Tax until implementation of the Managed Care Organization Tax in 2016 that helps fund California’s MediCal program. Applying a test first established in an earlier appellate decision in this case, the Court of Appeal determined that indemnity did not constitute a significant financial proportion of Blue Shield’s business and that it therefore was not an insurer for purposes of taxation.

To read the full decision, click here.



pursuant to New York DR 2-101(f)

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